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The Heckscher Ohlin theorem is an economic theory that depicts countries export those products that they can most easily and copiously produce. This theory of economics is mainly used to evaluate international trade equilibriums between countries having different features. This model also emphasizes how countries with comparative advantages export goods that need factors of production and they have adequate abundance in it. To know various aspects of this model in a more detail manner, choose Heckscher Ohlin theorem homework help service that can better explain each and every aspect of this theory.
What does this Heckscher Ohlin theorem explain?
The Heckscher Ohlin theorem explains the actual cause of the difference. However, Ohlin did not annul the classical theory but accepted and defined the comparative advantage as it causes international trade and analyses the theory in more logical manner. Therefore, it can rightly be said that Ohlin’s theory supplements but does not supersede the principles of the theory.
The theory of Ohlin is expounded in terms of two factors —
These two factors are considered as endowments. On the basis of these two factors, the gist of the theory can be explained such as what actually determine trade is the difference in factor endowments. Some countries have an abundance of capital, while others have plenty of labour. The Ohlin theory explains countries rich in capital export capital offer capital extensive goods, while countries rich in labour provide labour intensive goods.
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