Growth affect albanias terms of trade, International Economics

Assignment Help:

Q. Consider, as a result of several dynamic factors associated with exposure to international competition, Albania's economy grew, and is now shown by the rightmost production possibility frontier in the Figure above. If its point of production with trade was point c, could you consider this growth to be export-biased or import biased? If Albania were a large country with respect to the world trade of A and B, how could this growth affect Albania's terms of trade? Its real income?

Answer: If point c is the production point with trade after that Albania has a comparative advantage in good B. Consequently from the shape of the new production likelihood frontier as compared to the original one this is clearly an export-biased growth. This ceteris paribus would be likely to worsen Albania's terms of trade. The terms of trade effect would once more ceteris paribus worsen its real income. Though the growth itself acts in the opposite direction.

2015_Show Albanias comparative advantage.png


Related Discussions:- Growth affect albanias terms of trade

Ppp, what is ppp

what is ppp

Does foreign aid lead to economic growth?, Question 1: The main challen...

Question 1: The main challenge facing governments in the 21st century revolves around containing and/or downsizing of public spending. Explain why reduced government interventi

Calculate the effects of the fall in the relative price, Q. Calculate the ...

Q. Calculate the effects of the fall in the relative price of good 2 on the income of the specific factors capital and land. Answer: For the reason that good 2 uses land, a f

Study the effects of a change in market, Q. Use a figure to study the effec...

Q. Use a figure to study the effects of a change in market belief with regard to the fixed exchange rate, in particular assume market participants expect the government to devaluat

Global economics, How have global economic institutions(e.g. IMF,WB, and WT...

How have global economic institutions(e.g. IMF,WB, and WTO) been influenced by American values? Why have developing countries found it so difficult to adopt the neo-liberal econom

International trade, #question.what is the baises for international trade.

#question.what is the baises for international trade.

Exchange rate-based stabilization plan, Q. Explain why in exchange rate-bas...

Q. Explain why in exchange rate-based stabilization plan may result in a real appreciation? Answer: annotation 8 gives three reasons: first, persistent inflation because of s

Effects of a rise in real domestic money demand, Q. Using the AA - DD fra...

Q. Using the AA - DD framework, compare the effects of a rise in real domestic money demand under flexible and under fixed exchange-rate regimes. Answer: Under floating an i

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd