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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. 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
Q. If a scale economy is the dominant technological factor establishing or defining comparative advantage, then the underlying facts explaining why a particular country dominates
diagram
trade experience of developing countries
how trade lowers the costs of making computer peripherals such as mice and keyboards
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INTERNATIONAL FINANCE International finance is concerned with the mobility of financial capital across the countries, and the problems and opportunities this mobility p
Q. Why would you suggest to a government to use a floating exchange-rate regime? Answer: Floating Exchange Rate is an exchange rate in which central banks don't inter
Q. "Fixed exchange rates are not even an option for most countries." Discuss. Answer: Durable fixed exchange rate arrangements may possibly not even be possible unless c
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
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