CA Foundation P4 · Chapter 9 · Question 4 of 15
According to the Heckscher-Ohlin theory, a labour-abundant country will:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Export labour-intensive goods and import capital-intensive goods
Explanation
The Heckscher-Ohlin (factor endowment) theory states that a country exports goods that use its relatively abundant factor intensively, because that factor is relatively cheap. A labour-abundant country thus exports labour-intensive goods.
More International Trade MCQs
- Q6Which of the following is a non-tariff measure?
- Q7In international trade, 'dumping' refers to:
- Q8The World Trade Organization (WTO), which replaced GATT, came into existence on:
- Q9The 'Most-Favoured-Nation' (MFN) principle of the WTO requires that:
- Q10Other things being equal, a depreciation of the Indian rupee against the US dollar will tend to: