The ________ is a theory of the balance of trade that emphasizes ...

[mia]

The ________ is a theory of the balance of trade that emphasizes how domestic spending on domestic goods changes relative to domestic output.
 
  A) absorption approach
  B) monetary approach
  C) pass-through analysis
  D) elasticities approach

Question 2

Suppose that Brazil is capital abundant and Chile is natural resource abundant. If timber is natural resource intensive and computers are capital intensive, then according to the Heckscher-Ohlin Theorem, Chile should export goods that
 
  A) intensively use labor input.
  B) intensively use capital input.
  C) intensively use natural resources.
  D) use capital and labor in about equal proportions.

[Toya9913]

Answer to Question 1

A

Answer to Question 2

C