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Q. Suppose the U.S. government (but not Europe) offers a $10 million subsidy?
Answer: In this case Airbus would make a decision not to enter the market since it knows Boeing will and that so its own production will entail a loss of $5 million.
Using examples, from the government, illustrate the significant opportunity cost.
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Q. What is the domino effect or contagion? Answer: The definition is the defencelessness of even seemingly healthy economies to crisis of confidence generated by events
Q. Analyze the effects of an increase in the European money supply on the dollar/euro exchange rate. Answer: The major points are: A raise in the European money supply will re
Q. In autarky, Country P was producing at point 5. With trade, could its production point be found above or below point 5? Explain why. What must happen in the K/L intensity ratio
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Offer curves with example and explabation
Q. What can one learn from the following figure? Answer: The figure shows the U.S. current account as well as net foreign wealth from 1977 until 1996. It illustrate that a
What are the reasons behind the growing importance of services in trade ?
Open Cities & Open Coastal Areas: like the Sezs, aimed at attracting foreign investments and technology. They are : Dalian (Liaoning province); Qinhuangdao (Hebei), Tianjin, Yant
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