Economics · International Trade Theories
Assertion (A): Under the Heckscher-Ohlin theory, a capital-abundant country will export the capital-intensive good. Reason (R): Capital abundance lowers the relative price of capital, reducing the cost of producing capital-intensive goods and creating a comparative advantage. Select the correct answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is false, but R is true.
- 2A is true, but R is false.
- 3Both A and R are true, but R is NOT the correct explanation of A.
- 4Both A and R are true, and R is the correct explanation of A.✓
Correct answer
Both A and R are true, and R is the correct explanation of A.
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