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Q. Explain why, according to Feldstein and Horioka, one should expect that domestic investment rates diverge widely from saving rates.
Answer: The decisions of corporations to invest as well as for households to save are different. Therefore globalization indicates more and different ways to save and invest and increasing the differences between the two ratios.
In the Ricardian analysis, why does each trading partner have an incentive to produce at an endpoint of its production-possibility frontier? Why are prices of factors of production
Q. The 1980s are considered as the "lost decade" of Latin American growth. Explain why? Answer: Whilst the Great Depression made it hard for developing countries to make pa
Q . Is it possible that if positive scale economies characterize an industry, that its equilibrium can be consistent with purely competitive conditions? Explain how this would hap
alternative explanations to the theory of international trade.
Vernon's product cycle theory
Q. Explain how an increase in government spending would affect the DD-AA schedule in the short run. Answer: A raise in government spending will raise aggregate demand, which wi
Discuss the effects of ongoing inflation based on the PPP theory. Answer: Other things equivalent money supply growth at a constant rate eventually results in ongoing price le
#question.explain me Hecksher OHLIN theory of international trade in simple english
Q. Using 4 different figures, plot the time paths showing the effects of a permanent increase in the United States money supply on: A. U.S. money supply. B.
draw diagram of price leadership model
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