Final answer:
Porter's Diamond Model includes Factor Conditions, Demand Conditions, Related and Supporting Industries, and Firm Strategy, Structure, and Rivalry. 'Competitive conditions' and 'Supply conditions' could correlate with the latter two elements of the model but aren't named explicitly. The model helps understand a nation's competitive advantage and influence on economic prosperity beyond natural resources.
Step-by-step explanation:
The elements included in Porter's Diamond Model of national advantage are (1) Factor Conditions, (2) Demand Conditions, (3) Related and Supporting Industries, and (4) Firm Strategy, Structure, and Rivalry. The model also sometimes includes two additional elements: Government and Chance, which can also influence national competitive advantage. This question's options suggest Competitive Conditions and Supply Conditions, which could be considered part of Firm Strategy, Structure, and Rivalry (Competitive Conditions) and Factor Conditions (Supply Conditions). However, the specific terms "Competitive conditions" and "Supply conditions" are not explicitly named in the model. Export conditions and Social conditions are not part of Porter's Diamond Model.
Porter's Diamond Model is a strategic tool used to understand the competitiveness of a nation and how it can create and sustain economic prosperity. The model emphasizes that the source of comparative advantage does not solely depend on inherent natural elements like climate and mineral deposits but includes more complex elements such as nation's business environment and industrial competitiveness.
Regarding trade, three factors that determine whether a nation has a higher or lower share of trade relative to its GDP include the size of the economy, geographic location, and trade policies. Nations may restrict trade to protect industries crucial for national security, even if another nation has a comparative advantage in those products.