TX PACT Social Studies 7–12 (732) Practice Tests & Test Prep by Exam Edge

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TX PACT Social Studies Grades 7-12 Sample Test

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Which of the following is the discovery that the country with the world's highest worker per capita has a lower capital to labor ratio in exports than in imports?

Correct Answer:

the leontief paradox.

the correct answer to the question is b, the leontief paradox. this paradox was identified by the economist wassily leontief, who conducted an empirical test of the heckscher-ohlin theory (h-o theory) in 1953. the h-o theory predicts that countries will export goods that utilize their abundant factors of production, and import goods that utilize their scarce factors. according to this theory, a capital-abundant country would export capital-intensive goods and import labor-intensive goods.

however, leontief's findings were contrary to the predictions of the h-o theory. he discovered that the united states, which was the most capital-abundant country in the world, exported goods that were more labor-intensive relative to the goods it imported, which were more capital-intensive. this finding was unexpected because it contradicted the basic premise of the h-o theory regarding the relationship between factor abundance and trade patterns.

the significance of the leontief paradox lies in its challenge to traditional economic theories of international trade, prompting economists to reconsider and refine their models. various explanations have been proposed to resolve the paradox, including the possibility that u.s. exports might embody technological advantages or that the measures of capital intensity could be skewed by factors not accounted for in the basic h-o model.

overall, the leontief paradox serves as a critical point of study in international economics, illustrating the complexities and nuances of global trade beyond the simplistic models often proposed. its discovery has led to a deeper investigation into the various factors that influence trade flows between countries, enriching the academic discourse and understanding of international economic dynamics.

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TX PACT Social Studies Grades 7-12 Aliases Test Name

Here is a list of alternative names used for this exam.

TX PACT Social Studies Grades 7-12
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TX PACT Social Studies Grades 7-12 Certification Test
TX PACT Social Studies 7-12 test
TEXES
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TX PACT Social Studies Grades 7-12 (732)
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