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Q. International trade leads to complete equalization of factor prices. Discuss. Answer : This statement is usually "true...but". Under a limited and strict set of assumpti
Vernon's product cycle theory
explain the newo clacical theory of international trede
2. If a country's growth is biased in favor of its import, this should unequivocally improve its terms of trade and its economic welfare. Discuss. Answer: Suppose the Japan
Describe and explain the relationship between expected inflation rates in two countries and their interest rate differential according to the PPP theory. Answer: Expected pric
Q. What are the three main reasons why governments sometimes chose to devalue their currencies? Answer: 1. Permit the government to fight domestic unemployment despite the
Describe International Trade Theory?
International business involves the management of international risk. To minimize risks commercial parties utilize independent guarantees and standby letters of credit. (a) Dis
Q. Describe alternative forms of capital inflow to finance external deficits and explain why these methods were used in different times? Answer: The capital inflows to facili
Q. What do you expect would be the effects of 9/11 on the size of the Eurocurrency markets? Answer: Will increase because of fear that foreign deposits in the United States wi
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