Ricardian model, Macroeconomics

Assignment Help:

a) There is a general trade, and sometimes prominent as in case of UK, Canada, and Europe. When the tariff rates are showing an upward trend, the trade/GDP ratio is either declining or getting stagnant. Similarly, when it's showing a downward trend, the trade/GDP ratio is showing increasing.

b) The era of the GREAT DEPRESSION was a steep rise in the tariff rates throughout the world. This had actually worsened the situation. All countries were trying to protect their own indigenous industries. But, this situation had backfired.

Whenever, there is uncertainty in the market, or there is some kind of recession, countries throughout the world tend to increase the tariffs to protect their home based industries from foreign competition. However, this situation leads to a deepening of recession as demand gets constrained and hence there is a general phenomenon of overproduction. However, the correct approach should be the one which stimulates demand. This may be in the form of lowering the tariffs which will in turn, lead to availability of goods at lower prices in the market and hence will keep the produced stock of goods getting consumed. Coupled with increased government spending, this will help the world come out of recession.


Related Discussions:- Ricardian model

Gkx industries expects sales of its hydraulic seals, GKX Industries expects...

GKX Industries expects sales of its hydraulic seals (in inch and metric sizes) to increase according to the cash flow sequence $70+4k, where k is in years and cash flow is in $1000

Senator is considering tax, You are an assistant to a senator who chairs an...

You are an assistant to a senator who chairs an ad hoc committee on reforming taxes on telecommunication services. Based on your research, AT&T has spent over $15 million on relate

Investment multiplier, what is the formula for calculating investment multi...

what is the formula for calculating investment multiplier for 4 sector economy?

Calculate the demand and probability, Sally's Silk Screning produces specia...

Sally's Silk Screning produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event its

What do you mean by patulin, Q. What do you mean by Patulin? It is a to...

Q. What do you mean by Patulin? It is a toxic and antibiotic metabolite produced by several species of Penicillin, Aspergillus and Paeciliomyces but the most important in the c

Analyse and contrast the macroeconomic behaviour, Collecteconomic data for ...

Collecteconomic data for three countries: Australia, China and Greece.The data is toobtainedfrom official sources as time series forthe key macroeconomic variables. These arereal G

Wonderland department of commerce, In 2010, Wonderlanders consumed 15 milli...

In 2010, Wonderlanders consumed 15 million liters of rum at an average price of $5 per liter. The Wonderland department of commerce has estimated that the price elasticity of the d

Welfare economic, Write the compensation principal of socitovsky

Write the compensation principal of socitovsky

Average cost curve, A firm with a U-shaped average cost curve finds that it...

A firm with a U-shaped average cost curve finds that its revenues exceed its costs when it sets price equal to marginal cost. On which part of its average cost curve is the firm op

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