To what extent is the H/O Theory Superior to Classic Theory of International Trade

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To what extent is the H/O Theory Superior to Classic Theory of International Trade

Answered Same DayDec 22, 2021

Answer To: To what extent is the H/O Theory Superior to Classic Theory of International Trade

David answered on Dec 22 2021
126 Votes
To what extent is the H/O Theory Superior to Classic Theory of International Trade??
Answer:
The
classical theory of international trade is absolute advantage theory and comparative
advantage theory. Absolute advantage theory had many problems; 1) it assumed only labor cost
of production, 2) it fails to explain the trade scenario when a country has absolute advantage in
both the goods and 3) it assumed that a country would not produce all goods by itself.
The comparative...
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