Check whether the statement is true or false

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Each of the following theory statements is true except one. Which one is false? ( )

A) Factor-endowment Theory (Heckscher-Ohlin) says that a nation will export the product that uses a large amount of its relatively abundant resource and import the product which in production uses the relatively scarce resource

B) Factor-price Equalization Theory says that trade leads to a nation's cheap resources becoming relatively more expensive and the expensive resources becoming relatively less expensive

C) Stolper-Samuelson Theoremsays that even though free trade may provide overall gains for a country, the owners of relatively abundant resources will win and the owners of relatively scarce factors will lose

D) Specific-factors Theory says that resources specific to export industries gain as a result of trade while resources specific to import-competing industries lose

E) Increasing-returns Trade Theory says that nations with negligible differences in comparative-advantage have no basis for trade even if they can take advantage of massive economies of scale

Reference no: EM131088166

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