The Key Assumptions for the H-O Theory to Work Are

question 22

Multiple Choice

The key assumptions for the H-O theory to work are: 1) perfect competition in the marketplace; and (2) _____.

• A) perfect immobility of factors of production among countries
• B) superior allocation of production of goods and services
• C) very small labor force
• D) the existence of a trade surplus
• E) the acceleration of a trade deficit

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Definitions:

Street Smarts

Practical knowledge and skills needed for everyday life, emphasizing quick thinking and the ability to handle unexpected situations.

Creativity

The ability to generate novel and useful solutions to problems.

Creative People

Individuals who are able to think in novel, unusual, or inventive ways and apply creative thinking to problems and situations.

Overregularization

A language development error where children apply standard grammatical rules too broadly, often leading to incorrect verbal forms or constructions.