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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.
Q. Explain why price levels are lower in poorer countries. Answer: One theory explicate the difference in prices on different endowments of capital and employment Bhagw
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Q. At the conclusion of World War I, Germany, as a punishment, was obliged to take a large transfer to France in the form of reparations. Is it possible that the actual reparation
Countries are indulged in trade because there are mutual gains from trade. But then, what are these gains which they obtain, and how are these realized? Comparative advantage theor
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Q. What are the main functions of money? Answer: Money serves generally three important functions that are a unit of account, a medium of exchange and a store of value.
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