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Q. What is the theory of Second Best? Answer: The principal of the second best notify us that when an economy suffers from multiple distortions the removal of only a few
Q. Suppose the relative price of good 1 falls relative to the price of. What happens to the wage rate? Answer: The labour component of the price of 1 is bigger than that of p
Q. Factor-intensity reversals define a situation in which the production of a product can be land-intensive in one country, and relatively labor intensive in another ( at given re
Ask question #Effects of Tariff quota#
Q. Discuss the differences between Absolute PPP and Relative PPP. Answer: Absolute Purchasing Power Parity (PPP) states that the exchange rate between two currencies e
What are the International factor movements
Q. Why did the EU countries move away from the EMS toward the goal of a single shared currency? Answer: 1. To produce a superior degree of European market integratio
what are the theories supporting protectionism
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
Q. There is frequently a conflict between short-term and long-term interests in trade. Discuss. Answer: In trade models that the short term is usually defined as that (conce
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