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Q. What are the three types of transactions between the residents of different countries?
Answer:
1. Trades of services and goods for goods or services.
2. Trades of services and goods for assets.
3. Trades of assets for assets.
Q. Why is the H.O. model called the factor-proportion theory? Answer: The H.O. model survey the limitations and the nature of presumptuous that the sole determinant of compar
Q. How did the international monetary system influence macroeconomic policy-making and performance during the interwar period (1918 - 1939)? Answer: Governments efficiently sus
Q. Neoclassical and Classical trade theory makes the case that free trade can bring a country to an optimum and economically efficient use of its resources; and therefore is an op
In the Ricardian analysis, why does each trading partner have an incentive to produce at an endpoint of its production-possibility frontier? Why are prices of factors of production
Q. Define countertrade. Discuss the different forms of countertrade? Counter trade means all types of foreign trade in which the sale of goods to another country is associated
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
Q. The Specific Factors model makes a distinction between general-purpose factors that can move between sectors and factors that are specific to particular uses. How do difference
Q. Using the AA - DD framework, compare the effects of a rise in real domestic money demand under flexible and under fixed exchange-rate regimes. Answer: Under floating an i
The Source of Comparative Advantage can be understood as follows: The source of comparative advantage could be productivity differential (Ricardo) or differences in the factor
Discuss the relationship between PPP and the Law of One Price. Answer: The law of one price is applies to individual commodities while Purchasing Power Parity applies to the g
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