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If Trade Corresponds to the Heckscher-Ohlin Theory, Which of the Following

Question 44

Multiple Choice

If trade corresponds to the Heckscher-Ohlin theory, which of the following is most likely to happen in the long run after a labor-abundant country engages in free trade?


A) The rate of unemployment in the country is most likely to increase.
B) The total output in the economy will decline.
C) The capital to labor ratio in the export sector will increase.
D) The rental rates of capital will increase but the wage rates will decline.

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