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Q. In 1986, the price of oil on world markets dropped sharply. Since the United States is an oil-importing country, this was widely regarded as good for the U.S. economy. Yet in Texas and Louisiana, 1986 was a year of economic decline. Why?
Answer: The foremost exporting industry located in these two States is refining and Oil extraction. Since the factors of production specific to the oil industry could not shift out of them quickly and smoothly, their actual income suffered.
Q. How did countries use their policy tools to regain internal and external balance after the first oil shock of 1973? Answer: Seeing that the recession deepened over 1974 an
derive the eqilibrium equation for the trade balance
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explained with example
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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
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