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When asked by the Carnegie Commission to prepare a report on post war Preferential Trading Agreements, Viner (1950) pointed out that they are not free trade. He used the concepts o
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oppotunity cost theory of international trade.Explanation of the theory
Opportunity cost theory
Q. What are the three types of transactions between the residents of different countries? Answer: 1. Trades of services and goods for goods or services. 2
illustrate the circular flow of income of an open economy and explain the effects of various injections and withdrawal in the circular flow?
Q. Use the DD - AA model to examine and compare the response of an economy under fixed and floating exchange-rate regimes to a temporary fall in foreign demand for its exports.
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
draw diagram of price leadership model
Q. What is the national income identity for a closed economy? Answer: Y = C + I + G.
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