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Suppose when Russia opens to trade, it imports automobiles, a capital-intensive good.a. According to the Heckscher-Ohlin theorem is Russia capital-abundant or labor-abundant? Briefly explain.b. What is the impact of opening trade on the real wage in Russia?c. What is the impact of opening trade on the real rental on capital?d. Which group (capital owner or labor) would support polices to limit free trade? Briefly explain
Assume two nations that each manufacture two goods X and Y defined as follows. Assume that the home country experiences technological growth in X sector such that α rise to 12.
Explain how international trade affects our economy. How the idea of comparative advantage was relevant to trade negotiations?
During the 1980s, the US Cingress imposed a high sales tax on yachts, figuring that the rich could afford to pay for this luxury. But so many jobs were lost in the boat-building industry that the measure was finally repealed.
After a frenzied month of legislating, the House and Senate produced an economic stimulus bill estimated yesterday to cost $787 billion, with $281 billion in new tax cuts and the remainder in one-time spending on infrastructure investments, expand..
Examine the choices MNEs have for handling international trade payments. What are the main issues that affect their decisions? Describe your reasoning.
In some developing countries, you can see modern airports, huge government buildings, and new highway system around the capital city. However, those countries' real GDP are still low. Would you provide the possible reason to explain why
A recent Hal Varian commentary in the New York Times focused on the role of technological knowledge in explaining the different productivity experiences of Europe and the United States. Compared to Europe, the United States experienced much strong..
When China reformed state-owned enterprises, it tried a new approach to choosing managers: it put managerial jobs up for auction. The bids for the jobs consisted of promises of future profit streams that the managers would generate and then deliv..
In recent years the exchange rate of the $ has been noticeably high against the yen. If for some reason investors around the world now decide that this increase is a temporary phenomena and that the $ will fall relative to the yen in coming months..
Trade liberalization makes poor nations worse off because it displaces domestic production. It would be better to save fledgling domestic manufacturers from import competition in order to endorse industrial development.
In 2009, the US Postal Service increased first-class postage rates from 42 cents to 44 cents. The service had been losing money. One of the reasons is increased competition from companies such as United Parcel Service and Federal Express.
With the various sectors fighting each other in order to influence Japanese policy-makers, what is likely to happen to the yen and why was the yen strengthened even though the Japanese economy has been in a very sluggish growth pattern for a decade..
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