Having a high export total means you are generating your own revenue for your country and not reliant on debt to run your country. When you are unable to have the finances to run your country
Question Which of the following applies most generally to supply in the long run? Answer Producers are able to make change in all their factors of production. Average total cost must decline. Producers are only able to make change in their variable factors of production. All original producers will leave the market. Add Question Here
Suppose an import quota is set below the free trade level of imports. Decreases in imports will lessen the supply on the domestic market and raise the native price. In the new equilibrium, the native price will raise to the level at which import demand equals the value of the quota. Subsequently the country is small; there will be no effect on the world price, which will stay at PFT.
Refer to Fig.1, before trading and offshoring, Advanced is producing at point A on the production possibility frontier. It uses QR quantities of R&D resources and QC quantities of components, to produce Y0 amount of final goods. The straight line represents the relative price of components to R&D, which measures the value that Advanced places on components relative to R&D. Now with offshoring, there is a single world relative price. As the economic theory of Factor Price Equalisation states, trade establishes a single world price for the same good, and sets the same price for identical factors of production across countries (Sameulson, 1948). As a result, the Advanced produces more R&D and fewer components as shown by point
Exporters restricting their products to enter the market would decrease the total supply of the product in the market and later causes shortage in the market due to the inability of the local producers to meet the demand from consumers. Hence, the market can be considered as imperfect market due to the existence of inefficiency in the market. It is important to note that if the local producers were able to meet with the demand, they would be able to gain profit maximization and achieve economies of scale. It is also stated in Dhar and Conway’s study (1994) that when dumping-sector profits increases, other sector profits such as wages would also increase, thus implicating that dumping-sector profits have relations to other sector profits. Imposing anti-dumping measure would result the opposite. Knowing that the anti-dumping measure would increase the price of the imported goods, the exporting country would cut off their cost of production by cutting off their labors, thus increasing the unemployment rate of the exporting country. Trewin and Bosworth (1999, p.136) gave an example of a case, which it took in 1999, Australian manufacturer of A4 copy paper had claimed that Indonesia should be treated as an unsuitable market for assessment of ‘normal values’ because at that time, Indonesia was facing a major devaluation
The issue at hand is the elasticity of imports and exports in Asian countries and why the import and export demand elasticities are not constant as one would think. Import and export demand can change the price and income variables of a country. The study found that in Asian countries, if imports are price inelastic there will be a rise in import prices and will lead to an increase in the import bill. If imports of these countries are income elastic, an increase in incomes will lead to a more proportionate increase in imports. If exports from Asian countries are price inelastic, export earnings will rise as the prices increase. If exports from these countries are income elastic, an increase in incomes worldwide will lease to a greater than proportionate increase in exports (Keat, Young & Erfle, 2013).
Bangladeshi international trade is extremely small relative to the size of its population, although it experienced accelerated growth during the last decade. It is not very diversified and depends on the fluctuations of the international market. The Bangladeshi government struggles to attract export-oriented industries, removing red tape and introducing various financial and tax initiatives. Between 1990 and 1995 Bangladesh
If local company product not as good as imported products, civilian may buy imported products. It would decrease the demand for local goods, which mean local brands might be broke up. According to Baghdasaryan D. and Žigić K (2010), government tariffs’ target is preventing imported products to have higher competitive position than internal products. Furthermore, tariffs could protect domestic industry. Therefore, government applies a tax to increase the price of imported goods for helping regional brands to survive in the market. Additionally, some countries tend to open market in worldwide after they regard that their economic would not have obvious affect from other countries especially developed countries, they require their products to have same treatment in other countries, this requirement not only benefit to the exported countries’ industry but also may offer well known product to the world. Gene, Joel and Chantal (2009) claims that, in the World Trade Organisation (WTO), countries should obligate the General Agreement on Tariffs and Trades (GATT), but the people of developing country doubt that GATT and WTO could benefit to their own country because the organisation was held by industrialised countries. The successful case like India and China who have joined the WTO after they dismiss tariffs barrier. So, tariffs, in most case, effect imported goods’ price for influencing the demand on imported goods. The reason for this is
Given the problems of traditional export markets, Vietnam's rice exports in October 2013 fell 15.2% in volume and 17.9% in value (respectively one million tons and 562 million). The traditional market of Vietnam’s rice is Philippines, Indonesia, Malaysia also plummeted due to highly competitive market from India, Thailand, Pakistan,… Meanwhile, China importation had strengthened Vietnam's rice exports in the last two years, from nearly 310 thousand tons in 2011 to 2.08 million tons in 2012 and as of May 10, 2013 reached 1.93 million tons.
Goods and services produced in a country and being sold outside is globally known as export (Mankiw, 2004:240). Suppose that a country do an International Trade and become an exporter of some goods, domestic producers will get more benefits, while local consumers will get loss because the local price is higher. However, government policy about the opening of international trade itself will be profitable for both concerned countries (Mankiw, 2006:221).For Indonesia, the activities of the export has been encouraged since 1983. In the same year, export was getting more attention in order to spur Indonesia economy growth. Indonesia slowly changes its strategy of industrialization, from the emphasis on import substitution industries to export promotion industries. Along with this new policy, the economy of Indonesia is getting better. It was proven in 2008 that the cumulative value of export reached USD 118,430million, in other words it increased by 26.92 percent, while for non oil and natural gas sector reached USD 92,260million or increased by 21.63 percent. The other sector, for instance agricultural, industry, and mining had also increased, each by 34.65 percent, 21.04 percent, and 21.57 percent compared to the previous year.
(ii) better allocation of resources, (iii) improved capacity utilization and (iv) openness may induce higher foreign investment and take pressure off the price level. The degree of integration of the domestic economy with the global economy may influence the domestic price level. There may be a downward pressure on prices on commodities that are sold at a lower price in international markets and an upward pressure on the price of commodities which are sold at a higher price than in the international markets compared to domestic markets. Therefore the net effect on the domestic aggregate price level will depend on the interactions of the various prices of the commodities.
This paper uses time series data on Bangladesh from the WDI databank to find the impact of FDI inflow on exports. We’ve considered the time period from 1976. Bangladesh became independent in 1971. Just after birth, the nation adopted an import substitution trade policy. And consequently, discouraged export oriented industrialization. And FDI was forbidden till 1976. In 1976, Bangladesh took newer policies and thereby trade openness began. FDI also started to arrive. That’s why, we’ve excluded the years before 1976.
Government has never invited foreign investment for the production of basic goods. Agriculture sector, on which the major industries rely for the raw material has not been given sufficient subsidies. The major rise in the prices is because of the increasing prices of oil (as increased prices of oil increase the cost of production), but no such steps have been taken to control the oil prices. Domestic productions at less cost of production will not only make the availability of goods much easier but Aggregate Supply will also increase, and domestic industry will get developed.
Over the years, tax policy in the country has evolved in response to the development strategy and its changes. In the initial years, the tax policy was directed to increase the level of savings, transfer available savings for investment as envisaged by plan strategy and the need to ensure a fair distribution of incomes, to correct inequalities arising from the oligopolistic market structure created by the co-existence of private and public sector and the existence of other instruments of planning such as licensing system, exchange control, administered price