Why international trade is important for developing country

Assignment Help Microeconomics

Reference no: EM133564425

Questions:

1. Explain briefly why international trade is important for a developing country.

2. "It is not possible for trade to benefit all countries". Evaluate the validity of this statement in the context of the classical theories

3. According to a report by standard bank (2023), "traditionally, European countries are active investors in South Africa (United Kingdom, Netherlands, Belgium, Germany and Luxembourg), as well as the United States, Japan, China, and Australia. Most of the investments are directed to the financial, mining, manufacturing, transportation and retail sectors".

United States (US) is a source country for capital inflows into South Africa. You are informed that US is a capital abundant nation. The return on capital is higher in South Africa than in the US.

Use this information and a well-drawn diagram to explain (i) the effect of the flow of capital between the two nations on the nation's output and welfare and (ii) the effect of the flow of capital on world output and welfare.

Reference no: EM133564425

Questions Cloud

Explore an example of some market imperfections that exist : Explore an example of some market imperfections that exist. How could you exploit that to make some profit. Please do not use examples from the textbook;

Why is the worlds leading economy : Why is the world's leading economy and one of the richest countries (The US) in the middle of the pack on this index (KOF globalization index)?

Discuss the idea of price controls : Discuss the idea of price controls. You read about this in this week's unit, and our text referred to price controls as Price Ceilings and Price Floors.

Analysis of emergence of speculative or bubble finance : Discuss Stockman's analysis of the emergence of speculative or "bubble finance". Is Stockman accurate in his portrayal and if so, should we be concerned?

Why international trade is important for developing country : "It is not possible for trade to benefit all countries". Evaluate the validity of this statement in the context of the classical theories.

Why do you think brimetallism would improve the economics : Why do you think Brimetallism would improve the economics?

Effect of government procurement on home demand : Critically evaluate the effect of government procurement on home demand?

Do you think are more effective in promoting free trade : Which do you think are more effective in promoting free trade, the global or regional cooperative agreements? Why?

Discuss the biggest challenge facing the us economy today : Your assessment of what you consider to be the biggest challenge facing the US economy today.

User Account

All Pages