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In the article, "Is Free Trade Pass ," Paul Krugman summarizes and explains research that challenges, and presents alternatives to, the assumptions of classical trade theory based on comparative advantage. In a 4-6 page paper (12-point font, double-spaced) summarize positions that challenge the assumptions of constant returns and perfect competition (keeping in mind that empirical validation of trade theory requires only reasonable approximations to these conditions). Also, discuss the implications for classical trade optimism (the argument that free trade is always "a good thing"), and for trade policy and practice.
Based on your answer, identify who benefits and who is hurt because of the tariffs and also identify at least one industry that is likely to strongly lobby in favor of quotas and one that is likely to lobby against the quotas.
Suppose the U.S. government imposes a quota of 16 million units on its imports of semiconductors. Calculatethe magnitude of the deadweight loss resulting from the quota under the assumption that the U.S. is a small open economy.
The US cigarette industry has negotiated with Congress and government agencies to settle liability claims against it. Under the proposed settlement, cigarette companies will make fixed annual payments to the government
Use a graph of the pollution abatement market, model a situation in which the allocatively efficient level of abatement occurs at 100%,
Examine any foreign currency of your choice (preferably one from an emerging market), and provide analysis of that currency against the U.S. dollar over the 5-year period ending with 2010.
Suppose that the interest rate in Japan is 5%, the interest rate in Bhutan is 3%, and the spot exchange rate is 5 units of the Bhutan currency per unit of Japanese. What should the forward rate between these two countries be
The currency in Country A, say X, has been strengthening relative to the U.S. dollar; specifically,the average devaluation of the U.S. dollar has been 2.6% per year (which is projected to continue). Assume the present exchange rate is 6.4 units of..
You work at a firm on wall street that specializes in mergers, and you are the team leader in charge of getting approval for a merger between two major beer manufacturers in the United States.
Suppose a scenario where you are an entrepreneur considering to increase your production of kitchen gadgets. You need to pay back a loan of $5,000,000 over 5-years.
If American consumers decrease their spending on imports but leave their overall consumption spending constant, "hence buying more locally made goods", with all other factors constant what would happen to America's current Account and why
The United States is a debtor nation, just like the poorest states in Africa, Latin America, and Asia. For most of the past 30 years the United States has been piling up large trade deficits. The current account has now reached a deficit
Wholesalers of roses (the firms that supply your local flower shop with roses for Valentine's Day) buy and sell roses in containers that hold 120 stems. The table provides information about the wholesale market for roses in the United States.
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