Factor Price Equalisation Theorem

Question

21 Feb 2025

Answer :

Word Count : 235

The Factor Price Equalisation Theorem (FPE) is a key concept in international trade theory, introduced by Swedish economist Eli Heckscher and British economist Bertil Ohlin. It asserts that when countries engage in free trade, the prices of factors of production (such as labor and capital) tend to equalize across countries. The theorem assumes that countries have different resource _____ _____ __________ _______ ________ __________.
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