Match List I with List II

List I

Authors of Trade Theory

List II

Name of Theory

A.

Steffan Linder

I.

Product Life Cycle Theory

B.

Raymond Vernon

II.

Country Similarity Theory

C.

Hecksher-Ohlin

III.

Absolute Advantage Theory

D.

Adam Smith

IV.

Factor Proportion Theory

Choose the correct answer from the options given below:

Question

Question

This question was previously asked in

UGC Paper 2: Commerce_17th Oct 2020 Shift 1

Answer 1

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Authors of Trade Theory	Name of Theory
A. Steffan Linder	He developed the Country Similarity Theory in 1961 as he tried to explain the intra-industry trade. He proposed that consumers in countries that are in a similar stage of development would have similar preferences.
B. Raymond Vernon	Product Life Cycle Theory was propounded by Raymond Vernon in 1966. This theory explains the various stages a product goes through after it enters the market. It explains the reasons that determine all the stages i.e. introduction, growth, maturity, and decline, and how these stages determine foreign exchange.
C. Hecksher-Ohlin	Factor Proportion Theory was developed by two Swedish economists, Eli Hecksher and his student Bertil Ohlin in the 1920s. This theory states that a nation must specialize in the production and export of that product that makes use of its relatively abundant factor.
D. Adam Smith	Absolute Advantage Theory was introduced by Adam Smith in 1776 in the context of international trade, using labor as the only input. This theory states that when a producer can produce a good or service in greater quantity at the same cost or at a lower cost, than other producers.

Therefore, it is clear from the above explanation that option 2) is the correct answer.

	List I Authors of Trade Theory		List II Name of Theory
A.	Steffan Linder	I.	Product Life Cycle Theory
B.	Raymond Vernon	II.	Country Similarity Theory
C.	Hecksher-Ohlin	III.	Absolute Advantage Theory
D.	Adam Smith	IV.	Factor Proportion Theory