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Q. What are the three types of gains from international transactions between the residents of different countries?
Answer:
1. Gains due to comparative benefit and economies of scale.
2. Gains because of inter-temporal trade which is the exchange of goods and services for claims to future goods and services which is for assets.
3. Gains because of trades of assets for assets such as the exchange of real estate located in London for U.S Treasury bonds.
Question: (a) Illustrate the differences between inter and intra industry trade. (b) Foreign Investors generally tend to adopt a two-stage process when evaluating count
Q. Explain why East Asian countries have done so well relative to South American countries. Answer: Generally the reasons are less moral hazard less government debt to forei
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. Define countertrade. Discuss the different forms of countertrade? Counter trade means all types of foreign trade in which the sale of goods to another country is associated
critically examine the effects of tariffs on the level of employment and income distribution.
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The international financial system
Q. What factors lie behind capital inflows to the developing world? Answer: Several developing countries have received a lot of capital inflows that lead them to an
Q. It can be demonstrated that any protectionist policy, which effectively shifts real resources to import competing sector or industry, will harm export industries or sectors. T
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
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