The HeckscherOhlin model assumes that technology in each industry:
a. Is the same in each nation—each firm has access to the most profitable technology.
b. has increasing returns so that one nation will be able to gain a comparative advantage by developing new technology.
c. is very different across the world—some nations have access to technology, whereas others do not.
d. is hard to access because R&D is very expensive especially for lowincome nations.
Ans: a. Is the same in each nation—each firm has access to the most profitable technology.
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Suppose the development of the European Union leads to greater investment in Europe. You'd expect
A) a recession in Europe. B) a decline in the world real interest rate. C) a rise in the current account in Europe. D) an increase in the world real interest rate.
Bond prices in the marketplace will fall when
a. interest rates fall. b. the company is losing money. c. interest rates rise. d. the company is making money.