Ricardian model, Macroeconomics

Assignment Help:

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.


Related Discussions:- Ricardian model

Demand and supply, The Australian government administers two programs that ...

The Australian government administers two programs that affect the market for cigarettes. First, media campaigns and labelling requirements aimed at making public aware of the dan

Heckscher-ohlin model, Which of the following statements regarding the heck...

Which of the following statements regarding the heckscher-ohlin model and Ricardian trade theory is TRUE? a. Both the Heckscher-Ohlin and Ricardian models are current, relevant,

Determine the term - hot money, Determine the term - hot money A large ...

Determine the term - hot money A large 'hot money' inflow shifts the demand curve for currency to the right, leading to exchange rate rising and to an overvalued exchange rate

Explain why quantitative measures, Suppose a company is considering two inv...

Suppose a company is considering two investment projects. Both projects require an upfront expenditure of $30 million. The company estimates that the cost of capital is 10% and tha

Aggregate supply and the as curve, Aggregate supply and the AS curve ...

Aggregate supply and the AS curve The AS curve is the aggregate supply as a function of P. It is horizontal when thesupply is low and upward sloping when the s

Total firm''s cost schedules to calculate, Use the following data on a firm...

Use the following data on a firm's total cost schedules to calculate its average variable cost, average fixed cost, average total cost, and marginal cost schedules. Output Total

Natural resources are being rapidly depleted, Assume that there are only tw...

Assume that there are only two inputs (labor and natural resources) producing two goods (movies and gasoline) with no improvement in society's technology over time. Further, assume

Groth model, what role does interst rate play in refernce to output?

what role does interst rate play in refernce to output?

Estimated annual expense, The annual income from an apartment complex is $2...

The annual income from an apartment complex is $20,664. The annual expense is estimated to be $3,414. The apartment complex could be sold for $146,499 at the end of 10 years. If yo

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd