Empirical observations on actual North-South trade patterns tend to
A) support the validity of the Rybczynski Theorem.
B) support the validity of the wage equalization theorem.
C) support the validity of the neo-imperialism exploitation theory.
D) support the validity of the Leontief Paradox.
E) support the validity of the Heckscher-Ohlin model.

Question

Quizplus · Accepted Answer

Empirical observations on actual North-South trade patterns tend to support the validity of the Heckscher-Ohlin model. This model suggests that countries should specialize in the production and export of goods that use their abundant factor of production and import goods that use their scarce factors of production. This pattern of trade is observed in the North-South trade, where North countries specialize in skill-intensive goods and exports, while South countries specialize in labor-intensive goods and exports. This supports the Heckscher-Ohlin model's prediction that trade patterns are determined by differences in factor endowments between countries.

Empirical Observations on Actual North-South Trade Patterns Tend to