The Rybczynski Theorem asserts that an increase in the endowment of one factor of production, holding prices constant, leads to:

AAn equal percentage growth in both sectors

BA fall in national GDP

CAn immediate deterioration of terms of trade

DAn absolute increase in output of the sector using that factor intensively and a decrease in output of the other sector

Explanation

Rybczynski shows factor accumulation expands the factor-intensive sector while contracting the output of the other good.

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