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
Determine the present worth of a geometric gradient series with a cash flow of $50,000 in year 1 and increases of 6% each year through year 8. The interest rate is 10% per year.

Explain the excise terms of tax. The excise terms of tax: a. Tax incidence b. Excess burden c. Deadweight loss d. Tax revenue

what wil hapen to the real wage if the nominal wages and prices rise at the same rate per year?

Aggregate demand in the cross model Because C and Im depends positively on Y while G, I and X are exogenous, aggregate demand Y D will depend positively on Y:  Y D (Y) = C(

Are unions “harmful monopolies” or "necessary?" compare and contrast the schools of thought that subscribe and their point of views?

Assume an industry with one upstream and one downstream monopoly. The upstream monopoly produces Q , which is sold solely to the downstream monopoly. The downstream monopoly faces

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

TRADE policy: We are now in a position to sum up our analysis of India's trade policy. First, India's trade policy has always been very intricately related to India's basic de

Two drivers --- Tom and Jerry --- each drives up to a gas station. Before looking at the price, each places an order. Tom says, "I'd like 10 gallons of gas." Jerry says, "I'd like

How can an economic development be measured? The UN has developed an extensively accepted set of indices to measure development in opposition to a mix of composite (element or