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Q. Countries that are willing to tolerate an unusually high quantity of pollution relative to their supplies of other factors would leads to export "pollution-intensive" goods. Discuss using the Hechscher-Ohlin (H.O.) model.
Answer: This statement is deficiently crafted. It appears to imply that pollution per say is a proper factor of production. Namely, just like if you add a worker, you obtain additional product, thus the marginal product of pollution is positive. The trouble here is that pollution isn't really a factor of production, but somewhat an externality, which may perhaps be more typical of imported goods than exported ones. In such a case that, the above statement is false.
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Q. Using a figure, show that under full employment, a temporary fiscal expansion would increase output (over-employment) but cannot increase output in the long run. Answer: A t
graph
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Q. What do you think about dollarization? Answer: The respond is almost certainly a bad idea unless in the very short run. It must talk about the loss of seigniorage a
Q. "The costs and benefits for a country from joining a fixed-exchange rate area such as the EMS depend on how well-integrated its economy is with those of its potential partners.
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