With the opening of trade we would expect that the relatively abundant factor of production would earn... A. an increased relative return B. a decreased relative return C. Uncertain
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A: Answer to the question is as follows:
With the opening of trade we would expect that the relatively abundant factor of production would earn...
A. an increased relative return
B. a decreased relative return
C. Uncertain
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- Occasionally, a government official will argue thata country should strive for both a trade surplus and ahealthy inflow of capital from abroad. Explain why sucha statement is economically impossibleBuy American! Buy Spanish! British jobs for British workers! The ideology of economic nationalism seeks to implement trade policies that help to keep jobs and investment at home, while ignoring the advantages of open international trade and invest-ment. Economic nationalism was popular during the Great Depression of 1929–33, when it served to protect domestic firms from international competi-tion. However, this led to curtailing international business activity, making the global economic slow-down worse. Widely recognized as a myopic policy, economic nationalism nevertheless re-emerged dur-ing the global financial crisis that originated in the United States in 2008, prompting many analysts to wonder whether the public has learned anything from international business history.Soon after the U.S. stock market crash of 1929, Willis Hawley and Reed Smoot, two Republicans in the U.S.…True or False. And why? Suppose the US is a more capital-abundant economy than China. We would expect the trade war to be harmful to capital owners.
- c. Consider a Ricardian model with two countries, the US and Ecuador, producing two goods, bananas and machines. Suppose the unit-labor requirements are: aLBUS= 8, aLBE = 4, aLMUS = 2, aLME = 4. Let the US have 3200 workers and Ecuador have 400 workers. D. What would the pattern of trade be in free trade? Why? E. How much of each good would Ecuador produce in free trade if complete specialization occurred? F. Specify a plausible free trade terms of trade.Occasionally, a government official will argue that a country should strive for both a trade surplus and a healthy inflow of capital from abroad. Explain why such a statement is economically impossible.Occasionally, a government official will argue that a country should strive for both a trade surplus and a healthy inflow of capital from abroad. Is this possible?
- If the removal of trade banters is so beneficial to international economic growth, why would a nation continue to restrict trade on some imported or exported products?For this question, treat the countries listed in each row as the home country, and treat the United States as the foreign country. Suppose the cost of the market basket in the United States is PUS = $190. Check to see whether PPP holds for each of the countries listed and determine whether we should expect a real appreciate or real depreciation for each country (relative to the United States) in the long run. You can fill out your answers in the table directly but please show how you worked out the problem for Brazil using the space below the table. Round your answers to 2 decimal places if necessary. Country (currency measured in FX units) Per $ (EFX/$) Price of Market Basket (in FX) Price of U.S. Basket in FX (PUSx EFX/$) Real Exchange Rate qcountry/US Does PPP Hold? (yes or no) Is FX Currency Overvalued or Undervalued? Is FX Currency Expected to Have Real Appreciation or Depreciation? Brazil (real) 4.07 520 India…By using the concept of the Standard Trade Model, and the assumptions of the H-O model. a) Explain with a graph why with the increase in the relative price of Cloth PC/PFthen should domestic export Cloth?b) If a country exports Cloth and imports Food, then there isbiased growth on cloth, how will it affect the terms of trade?Explain.c) With the same assumptions in number b), what is the impact of export-biased growth and import biased growth of domestic countries on welfaredomestic? Explain
- True/False/Uncertain and Explain Gains from trade arise when countries specialize in producing the goods for which they hold an absolutely advantage and then trade.The U.S. firm will now be able to produce ___. more than less than the same as before, since it can now produce at __. Y3 Y2 Y1 c. Does the U.S. firm gain from advances in R&D abroad? Why?Q.No.3. You agree or disagree with statement that Globalization brings benefits for MNC’s. If you have been given an option for investment globally will you choose it or not? Give example & reasons in support of your answer. At least 5 reasons for your answer support