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Mercantilism is a sixteenth-century economic philosophy that maintains that a country’s wealth is measured by it’s holdings of gold and silver. According to mercantilists, a country’s goal should be to enlarge these holdings by promoting exports and discouraging imports.
Mercantilism Neomercantilists or Protectionists: are modern supporters of mercantilist policies becausethey benefit them. Those are textile manufacturers, steel companies, sugar growers, and peanut farmers etc.
Relative Factor Endowments The theory of relative factor endowments refers the Heckscher-Ohlin theory:A country will have a comparative advantage in producing products that intensively use resources(factors of production) it has in abundance . These economists made two basic observations:
Relative Factor Endowments 1. Factor endowments are types of resources vary among countries such as land, labor, capital, and entrepreneurship that a country possesses and can exploit for manufacturing. Countries with a large endowment of resourceswill have a comparative advantage in producing products and tend to be more prosperous than those with a small endowment.
Relative Factor Endowments Goods differ according to the types of factors that are used to produce them. For example, wheat requires fertile land, oil production requires crude oil reserves, and apparel manufacturing requires unskilled labor.
Relative Factor Endowments This theorywastested in United States after WWII by economistWassily Leontief. It suggeststhat US should export capital-intensive goods and import labor-intensive goods
Group members Panhavuthly ID: 53010919063 Kakadakong ID: 53010919683 BenjamapornThitpipit ID: 53010919029 JanthanipaPhansaoID 53010919008