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Q. In autarky, Country P was producing at point 5. With trade, could its production point be found above or below point 5? Explain why. What must happen in the K/L intensity ratio
How is the foreign exchange rate determined?
Q. Why are prices of factors of production not equalized? Answer: Again this statement may not or may be argued to be true. On the other hand, the growth and large volume in
Q. Explain what a "vehicle currency" is. Why is the U.S. dollar considered a vehicle currency? Answer: A vehicle currency is one specifically widely used to denominate inter
Q. What is the real exchange rate between the dollar and the euro equal to? Answer: Let actual dollar/euro exchange rate q$/ENominal exchange rate E$/EPrice of an unchan
what are the alternative theories of international trade?
what is the criticism of opportunity cost
Q. Discuss the benefits and costs of joining a fixed-exchange area. Answer: Benefits generally gains from the stability of the area and reduced uncertainty. The compete
Q. Explain how a rise in real income affects aggregate demand. Answer: An increase in domestic real income Y leads to a rise in disposable income Yd. This increases
#question.explain me Hecksher OHLIN theory of international trade in simple english
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