The Difference Between Ricardo's Theory and the Heckscher-Ohlin Theory Is

question 125

Multiple Choice

The difference between Ricardo's theory and the Heckscher-Ohlin theory is that the Heckscher-Ohlin theory

• A) makes more simplifying assumptions.
• B) cannot be subjected to empirical tests.
• C) actually predicts trade patterns with greater accuracy.
• D) argues that the pattern of international trade is determined by differences in national factor endowments.
• E) suggests that trade is a positive-sum game in which all countries that participate realize economic gains.

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Definitions:

Aggregate Demand

The full volume of demand for goods and services in an economy, priced at a particular level, within a designated period.

Aggregate Supply

Aggregate supply represents the total amount of goods and services that producers are willing and able to supply at a given overall price level in an economy.

Stock Market Prices

The current price at which a share of a company is bought or sold in the stock market.

Aggregate Demand

The total demand for all goods and services within a particular market over a specific time period.