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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.
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Q. Countries do not in fact export the goods the H.O. theory predicts. Discuss. Answer: This statement isn't true that though one may find several cases where it seems to be
Q. Define countertrade. Discuss the different forms of countertrade? Counter trade means all types of foreign trade in which the sale of goods to another country is associated
According to the Linder theory, trade will occur in goods that have overlapping demand. With aid of a graph, illustrate this theory and its implications. Make use of graph
To answer the following question, please refer to the figure below. Concentrating only at the lower right quadrant, discuss the effects of a change in U.S. expected inflation.
Does the existence of non-tradable goods allow for deviations from Purchasing Power Parity? Answer: Yes the continuation of non-tradable goods permits deviations from Purchas
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Q. Explain why East Asian countries have done so well relative to South American countries. Answer: Generally the reasons are less moral hazard less government debt to forei
(a) Consider there are two countries (country 1 and country 2) with two goods (X and Y). Further, under the assumptions of the Ricardian model, country 1 specialise in goods X. De
By Using the figure describing both the U.S. money market and The foreign exchange market, analyze the effects of an increase in the U.S. money supply on the dollar or euro exchang
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