πŸ“Š International Economics
Q. If relatively capital-abundant country A opens trade with relatively labor- abundant country B an the trade takes place in accordance with the Heckscher-Ohlin Theorem. What would be the consequence for factor prices (w/r) in the two countries?
  • (A) (w/r) rises in A and falls in B
  • (B) (w/r) rises in A and also rises in B
  • (C) (w/r) falls in A and rises in B
  • (D) (w/r) falls in A and also falls in B
πŸ’¬ Discuss
βœ… Correct Answer: (C) (w/r) falls in A and rises in B

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