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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.
Explain the law of demand. Briefly discussed the exception to the law of demand
Q. Describe the effects of the Smoot-Hawley tariff imposed by the United States in 1930. Answer: It had a damaging consequence on employment abroad. The foreign response occu
Q. Contrast the crisis in Poland and Russia. Explain why the Polish economy has done better? Answer: With the end of the 1990s a handful of East European economies including
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
Q. Suppose both governments offer their respective company a $10 million subsidy. Answer: Mutually companies would enter the market as each one knows that regardless of the o
what you do understand by the term effective rate of protection
Q. How can long-run values in the real exchange rate change? Answer: A elevate in world relative demand for U.S output origins a long-run real appreciation of the dollar
Revisions of Conventional Trade Theory
I am trying to complete this homework assignment and I need to use an example to describe and explain the classical theory of international trade, could you guys help me out?
Using the Heckscher-Ohlin model, discuss how the differences in supply and demand conditions between countries create a basis for trade.
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