This topic contains a solution. Click here to go to the answer

Author Question: Countries do not in fact export the goods the H.O. theory predicts. Discuss. What will be an ... (Read 90 times)

rayancarla1

  • Hero Member
  • *****
  • Posts: 571
Countries do not in fact export the goods the H.O. theory predicts. Discuss.
 
  What will be an ideal response?

Question 2

Interest differentials cause exchange rate changes.
 
  Indicate whether the statement is true or false



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

ririgirl15

  • Sr. Member
  • ****
  • Posts: 385
Answer to Question 1

This statement is not true. Although one may find many cases where it seems to be true (e.g., the Leontief Paradox), all one needs to do in order to render the above statement not (generally) true is to find one counter example. In fact, one can find large subsets of agricultural and commodity products in which the H.O predictions are generally fulfilled. Labor-intensive countries such as Bangladesh do in fact export relatively labor-intensive goods. Capital-intensive countries such as Germany do in fact export capital-intensive products (at least to South countries). Countries such as Costa Rica (sunshine abundant) tend to export bananas (sunshine-intensive products). The U.S. (a wheat-land-abundant country) does indeed export wheat (a wheat-land intensive product). In fact, since the early 1980s, the Leontief Paradox was not found to describe the U.S. trade data (hence ratifying the H.O. theory).

Answer to Question 2

FALSE
Explanation: In the real world interest rates, inflation expectations, and exchange rates are jointly affected by new information and new events. So, interest rates and exchange rates are determined simultaneously.




rayancarla1

  • Member
  • Posts: 571
Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it


bigsis44

  • Member
  • Posts: 317
Reply 3 on: Yesterday
:D TYSM

 

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Did you know?

Coca-Cola originally used coca leaves and caffeine from the African kola nut. It was advertised as a therapeutic agent and "pickerupper." Eventually, its formulation was changed, and the coca leaves were removed because of the effects of regulation on cocaine-related products.

Did you know?

The average older adult in the United States takes five prescription drugs per day. Half of these drugs contain a sedative. Alcohol should therefore be avoided by most senior citizens because of the dangerous interactions between alcohol and sedatives.

Did you know?

The highest suicide rate in the United States is among people ages 65 years and older. Almost 15% of people in this age group commit suicide every year.

Did you know?

Illness; diuretics; laxative abuse; hot weather; exercise; sweating; caffeine; alcoholic beverages; starvation diets; inadequate carbohydrate consumption; and diets high in protein, salt, or fiber can cause people to become dehydrated.

For a complete list of videos, visit our video library