Ricardian model, Macroeconomics

a) There is a general trade, and sometimes prominent as in case of UK, Canada, and Europe. When the tariff rates are showing an upward trend, the trade/GDP ratio is either declining or getting stagnant. Similarly, when it's showing a downward trend, the trade/GDP ratio is showing increasing.

b) The era of the GREAT DEPRESSION was a steep rise in the tariff rates throughout the world. This had actually worsened the situation. All countries were trying to protect their own indigenous industries. But, this situation had backfired.

Whenever, there is uncertainty in the market, or there is some kind of recession, countries throughout the world tend to increase the tariffs to protect their home based industries from foreign competition. However, this situation leads to a deepening of recession as demand gets constrained and hence there is a general phenomenon of overproduction. However, the correct approach should be the one which stimulates demand. This may be in the form of lowering the tariffs which will in turn, lead to availability of goods at lower prices in the market and hence will keep the produced stock of goods getting consumed. Coupled with increased government spending, this will help the world come out of recession.

Posted Date: 2/28/2013 6:49:53 AM | Location : United States







Related Discussions:- Ricardian model, Assignment Help, Ask Question on Ricardian model, Get Answer, Expert's Help, Ricardian model Discussions

Write discussion on Ricardian model
Your posts are moderated
Related Questions
Government revenue, government spending and net exports  G, NT and NX are exogenous variables in the classical model In the classical model (and

Macroeconomic performance The UK's future macroeconomic performance must be judged on how average living standards improve, inflation is kept under control, economy grows and

Let a macroeconomic model be of the following form: C = a + bY D                             a = 10 T = T 0                                   b = 4/5 G = G 0

After a competitive bidding process, Firm G wins a contract to collect and dispose of Firm H's hazardous waste for $1,000 per year. Firm G's labor costs are $200 per year, and beca

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

unplanned changes in inventory are counted as inventory spending by firms.say true or false and justify


Arrow up or down: An increase in the wage for high school graduates __________ the opportunity cost of college. A) arrow up B) Arrow down

What is total surplus in net gain? Total surplus in net gain: The total surplus generated into a market is the total net gain to consumers and producers through trading into

I need some help organizing an outline for a 5000-6000 word paper. What I am asking for is ideas on how to best organize this topic: "Should Government do it all? Can outsourcing t