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Question 1:
(a) Clearly distinguish between the theories of Absolute and Comparative advantage of trade.
(b) According to you, can the ‘Factor Endowment Theory' be a reasonable explanation of the pattern of world trade nowadays?
Question 2:
(a) Explain, with the use of diagrams, the difference between a tariff and a quota.
(b) Over the recent years, subsidies and domestic support in agricultural trade has become a significant issue in international trade negotiations. Discuss how subsidies in agricultural trade is trade distorting.
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