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Q. Why do you suppose that South-South trade does not conform in volume, but does conform in pattern with expectations prepared by the Heckscher-Ohlin model?
Answer: The pattern of trade is usually observed to conform to the Heckscher-Ohlin models expectations. Namely the developing countries are likely to export labour-intensive goods such as textiles and import capital-intensive goods such as machinery. The volume though is quite lower than what would be expected from the neoclassical model. There are several possible reasons such as financial crises necessitating premier in the financing of this trade.
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Q. Is Europe an optimum currency area? Answer: Yes the area's economy is strongly integrated with its own: most EU members export as of 10 to 20 percent of their output
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#question.explain me Hecksher OHLIN theory of international trade in simple english
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