Why Is "Intra-Industry" Trade Difficult for the Heckscher-Ohlin Trade Theory

question 71

Multiple Choice

Why is "intra-industry" trade difficult for the Heckscher-Ohlin trade theory to explain?

• A)Most of it is conducted between developing countries,which the theory predicts little of.
• B)Since the products are within the same industry and made with the same factors,differences in factor endowment cannot explain it.
• C)Countries with abundant labor are not expected to also import labor-intensive products.
• D)Industries are expected to compete with each and not trade with each when factors are immobile.

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Definitions:

General Journal

A fundamental accounting record where all transactions are initially recorded using debits and credits, before being transferred to specific accounts in the ledger.

T-Accounts

T-Accounts are a tool used in accounting to visualize credit and debit transactions for individual accounts, resembling the letter “T”.

Account Payable

An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors or suppliers.

T-Accounts

A bookkeeping tool used to visualize and manage debits and credits for individual accounts.