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MULTIPLE CHOICE A country whose ratio of capital to other factors of production is greater than...

MULTIPLE CHOICE

A country whose ratio of capital to other factors of production is greater than the rest of the world’s ratio of capital to other factors of production is:

  1. Relatively capital-intensive.

  1. Relatively capital-abundant.

  1. Running a trade deficit.

  1. Operating at a point inside its production possibilities curve.

Please explain. Thank you!

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Answer #1

Ans- Relatively capital abundant .

A country is relatively capital abundant if its relative endowment of capital is large as compared to other countries.

The Heckscher-Ohlin theorem states that a country that is capital abundant will export the capital-intensive good.

If you have any doubt feel free to ask.

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