The difference between Ricardo’s theory and the Heckscher-Ohlin theory

QUESTION

The difference between Ricardo’s theory and the Heckscher-Ohlin theory is that the Heckscher-Ohlin theory:

A. makes more simplifying assumptions.

B. cannot be subjected to empirical tests.

C. actually predicts trade patterns with greater accuracy.

D. argues that the pattern of international trade is determined by differences in national factor endowments.

E. suggests that trade is a positive-sum game in which all countries that participate realize economic gains.

ANSWER

D