Which trade theory predicts that countries with similar preferences and technologies but dissimilar factor endowments will experience potential gains from trade?
A) specific-factors theory
B) Stolper-Samuelson theorem
C) Linder's theory
D) Heckscher-Ohlin theory

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin theory predicts that countries will export goods that utilize their abundant and cheap factors of production, and import goods that utilize the countries' scarce factors. This theory specifically addresses the benefits of trade between countries with different factor endowments but does not necessarily require differences in technology or preferences.

Which Trade Theory Predicts That Countries with Similar Preferences and Technologies