According to the Heckscher-Ohlin theory, if the proportion of labor to capital in a country is greater than the proportion of labor to capital in the rest of the world, we can conclude that the country is labor-abundant and will have a comparative advantage in the production of goods that use labor intensively.

The difference between short-run and long-run cost is that in the long run,

a. there are shortages of labor that can restrict output b. only labor can be changed to increase or decrease production c. fixed factors of production have already been chosen d. there are no diseconomies of scale e. all factors of production are variable

If two countries choose to fix the exchange rates among their currencies, then

A. the country with a current account surplus can decrease its money supply to delay the need for intervention. B. there usually is more pressure on the government whose country has an overall payments surplus than on the government whose country has an overall payments deficit. C. the country with a lower rate of inflation will eventually have large current account surpluses. D. both countries will have an inflation rate of zero.