Heckscher-ohlin theory, International Economics

Assignment Help:

Q. Countries do not in fact export the goods the H.O. theory predicts. Discuss.

Answer: This statement isn't true that though one may find several cases where it seems to be true (e.g. the Leontieff Paradox), all one requires to do in order to render the above statement not (generally) true is to find one counter example. Actually, one is able to find large subsets of agricultural and commodity products in which the H.O predictions are usually fulfilled. Labor-intensive countries for instance Bangladesh does in fact export relatively labor-intensive goods. Capital-intensive countries for instance Germany does in fact export capital-intensive products at least to South countries. Countries for illustration Costa Rica ("sunshine abundant") tend to export bananas (sunshine-intensive products). The U.S. (a wheat-land -abundant country) does certainly export wheat (a wheat-land intensive product). Actually, ever since the early 1980s, the Leontieff Paradox wasn't found to describe the U.S. trade data therefore ratifying the H.O. theory.


Related Discussions:- Heckscher-ohlin theory

Explain the difficulties in naming the new european currency, Q. Expl...

Q. Explain the difficulties in naming the new European currency. Answer: Amongst the reasons: Maintenance the name ECU would be misleading the ECU depreciated sharply ag

Foreign trade, What are the two main base of foreign trade ?

What are the two main base of foreign trade ?

Fixed-exchange rate area, Q. "The costs and benefits for a country from jo...

Q. "The costs and benefits for a country from joining a fixed-exchange rate area such as the EMS depend on how well-integrated its economy is with those of its potential partners.

Domestic money market, Q. "Under floating rates, the economy is more vulner...

Q. "Under floating rates, the economy is more vulnerable to shocks coming from the domestic money market." Discuss. Answer: It is true statement, under floating rates an incr

Exchange rate determination, Q. Describe the chain of events leading to exc...

Q. Describe the chain of events leading to exchange rate determination for the following cases: 1. An increase in the U.S money supply 2. An increase in the growth rate of the

Why heckscher-ohlin theory called factor-proportion theory, Q. Why is the ...

Q. Why is the H.O. model called the factor-proportion theory? Answer: The H.O. model survey the limitations and the nature of presumptuous that the sole determinant of compar

Tariffs, what are the different types of tariffs?

what are the different types of tariffs?

Compare currency board to conventional fixed exchange rate, Q. Compar...

Q. Compare currency board to conventional fixed exchange rate? Answer: Currency board mayn't acquire domestic assets and therefore cannot lend currency freely to domesti

Capability, In the International Medical Center, clients are patients who ...

In the International Medical Center, clients are patients who use the services provided by the hospital, such as the health program, preventive services, and surgery. Other custom

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd