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Q. It is claimed that the persistence of protectionism is often the result of the fact that those who lose from trade are usually a much more informed, cohesive and motivated a group than those who gain. Give a specific example from "real life" that supports this claim.
Answer: The shift of shipbuilding comparative benefit in shipbuilding away from the U.S. has basis economic damage to trained shipbuilders, and to owners of shipyards, as well as to peripheral businesses located near such shipyards. These groups as well as their Congressional representatives will be extremely much aware of the damage being done. The gainers would be those who pay rather lower shipping charges, or lower retail prices caused by the use of cheaper (foreign built) ships. Because shipping is usually a very small component of total retail cost this gain will hardly be noticeable by any one single group in the economy.
Q. Suppose Albania is exporting product B, and experienced economic growth biased in favor of product B as seen in the Figure above. We are also told that Albania's new consumptio
Using the Heckscher-Ohlin model, discuss how the differences in supply and demand conditions between countries create a basis for trade.
Discuss the exceptional supply curve
Q. Discuss studies based on the interest parity conditions. Answer: Generally the formula doesn't hold and isn't a good predictor of future devaluations. Even poorer it
what is this all about
Q. Present the case against floating exchange rates. Answer: 1.The discipline obligatory on individual countries by a fixed rate would be lost. 2. Undermine specu
1. Explain why many Asian countries set up Export Processing Zones and why China set up Special Economic Zones. What are the similarities and differences between EPZs and SEZs?
Q. Other things being equal, a rise in a country's terms of trade enhances its welfare. What could happen if we relax the ceteris paribus assumption, and allow for the law of dema
Q. Developing countries have often attempted to establish cartels so as to counter the perceived or actual inexorable downward push on the prices of their exported commodities. OP
Q. What are the factors affecting the demand for foreign currency? Answer: Three factors that affect the demand for foreign currency are risk, expected return, and liquidity.
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