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Discussing Production and Trade
Questions:
1. Out of all of the possible production points along a production possibilities curve, which one of those points does a nation select and why?
2. International trade theory says that relative product prices would differ if there was no trade between the countries. What is the basis for this theory?
3. What does the Heckscher-Ohlin Theory say about what determines the trade patterns between countries?
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Explain The standard IMF policy prescribes tight monetary policy and reduced government spending for developing nations experiencing a currency crisis.
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