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Q. Why do you suppose that South-South trade does not conform in volume, but does conform in pattern with expectations prepared by the Heckscher-Ohlin model?
Answer: The pattern of trade is usually observed to conform to the Heckscher-Ohlin models expectations. Namely the developing countries are likely to export labour-intensive goods such as textiles and import capital-intensive goods such as machinery. The volume though is quite lower than what would be expected from the neoclassical model. There are several possible reasons such as financial crises necessitating premier in the financing of this trade.
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Q. Explain why the dollar of the United States became the postwar world's key currency. Answer: 1. The untimely convertibility of the U.S dollar in 1945. 2.
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Q. If scale economies were not only external to firms, but were also external to individual sites. That is, the larger the worldwide industry (regardless of where plants or firms
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