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