Briefly explain the Heckscher-Olin (H-O) Theory.
What will be an ideal response?
POSSIBLE RESPONSE: The H-O theory focuses on an important source of production-side differences that cause countries' production-possibility curves (PPC) to skew in different ways. International differences in the shapes of bowed-out PPCs can occur because (1) different products use the factors of production in different proportions and (2) countries differ in their relative factor endowments. The H-O theory of trade patterns predicts that a country exports products that are produced with more intensive use of the country's relatively abundant factors in exchange for imports of products that use the country's relatively scarce factors more intensively.
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Which of the following statements about the budget deficit is TRUE?
A) It is equal to the public debt. B) It is a stock variable. C) It is a flow variable. D) none of the above
What factor, more than anything else, tends to make people wealthy?
A) Time B) Money C) Productive knowledge D) Control over non-renewable resources E) The ability to day-trade internet-related stocks