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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 comparative advantage is inter-country differences in (relative) factor proportions.
If one were to use the simple monetary model to predict the $/Euro exchange rate (L is constant), what would the expected exchange rate be?
Assume the United States exports 1000 computers at a price of $3000 each and imports 15 UK autos at a price of 10000 pounds each. Assume that the dollar/pound exchange rate is $2 p
Criticism against Hechscher-Ohlin type trade theories is explained below: The foremost criticism leveled against Hechscher-Ohlin type trade theories are that they views compara
What can explain the failure of relative PPP to hold in reality? Answer: Government procedures of the price level differ from country to country. One cause for these differe
What is the role of foreign trade in an economic development of a country
Q. Why are prices of factors of production not equalized? Answer: Again this statement may not or may be argued to be true. On the other hand, the growth and large volume in
Q. Explain why the EMS countries decided to fix their exchange rates against the German DM? Answer: In this manner the other EMS countries in effect imported the credi
discuss the superiority of haberler''s theory of opportuinity cost over mill''s theory reciprocal demand?
Q. Presumably, since the United States is a large country in many of its international markets, a positive optimum tariff exists for this country. It follows thus that when any l
discuss the central economic problem facing this group of survivors.
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