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Q. Countries that are willing to tolerate an unusually high quantity of pollution relative to their supplies of other factors would leads to export "pollution-intensive" goods. Discuss using the Hechscher-Ohlin (H.O.) model.
Answer: This statement is deficiently crafted. It appears to imply that pollution per say is a proper factor of production. Namely, just like if you add a worker, you obtain additional product, thus the marginal product of pollution is positive. The trouble here is that pollution isn't really a factor of production, but somewhat an externality, which may perhaps be more typical of imported goods than exported ones. In such a case that, the above statement is false.
Q. The Heckscher-Ohlin model is famous for being elegant and mathematically sophisticated, yet failing to define reality. One manifestation of this fact is Trefler's Case of Missi
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How do countries gain under the increasing cost assumptions
how is exchange rate determined?
International business involves the management of international risk. To minimize risks commercial parties utilize independent guarantees and standby letters of credit. (a) Dis
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opportunity cost version is an improvement over the classical theory of international trade?comment
Q. Using figures for both the short run and the long run, show the effects of a permanent increase in the U.S. money supply. Try to line up your figures to the short and long run
what is this?.
Q. Explain Purchasing Power Parity. Answer: PPP () states that the exchange rate between two countries' currencies equals the ratio of the countries' price levels.
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