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Discuss the applicability of the Stolper-Samuelson theorem for predicting terms of trade in two countries.
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- Of all the arguments for placing limitations on trade, which of the following would most likely be characterized as being the most controversial among economists? a) bank/financial sector regulation argument b) quantitative easing argument c) the infant industry argument d) floating currency argumentMany economists predict the eventual rise of China as a "superpower" because of economic reform, along with a strong work ethic and increased emphasis on higher education for its population. How do you think trade between Asia, Europe, and North America will be affected by China's continued development?In 2020, Spain had a population of 46 million and its capital stock was US$90,000 billion. The corresponding figures for Australia were 26 million and US$75,000 billion. Suppose computer-chips manufacturing is capital-intensive relative to food processing. As such, in a two-factor, two-commodity and two-country world, Australia would have exported computer-chips to Spain and imported processed foods from Spain. Do you agree? Justify your answer using an appropriate trade model
- Which of the following arguments for limitations on trade is more controversial among economists? Group of answer choices Limiting trade out of environmental concerns Limiting trade out of fear over losing jobs domestically Limiting trade to protect new industries Limiting trade to avoid unfair labor practicesIn intentional trade negotiations, it is very common for a country's trade representative to threaten to enact protectionist policy that include: tariffs, quotas, quota-tariff, national security restrictions, and domestic content requirements. Define what each of these protection policies. Explain why quotas are usually the least creditable threat. If the trade represents a small importing country, would it make economic sense to threaten tariffs? Why or Why not?In free trade, the world price of goods directly imported by China is 400 US dollars; the price of the key components of imported goods is 160 dollars. In order to protect domestic production, China has decided to impose 90 % tariff rate on imported goods and 60% tariff rate on key components of the goods. How much is the effective tariff protection rate(ERP) for the goods calculated by two methods respectively?
- A common market takes place when (in the presence of tariffs on imports) Select one: any 2 countries liberalize the movement of their labor (and capital) any 2 countries align their monetary policies any 2 countries have free trade between them none of the aboveAssume that the comparative-cost ratios of two products-baby formula and tuna fish-are as follows in the nations of Canswicki and Tunata: Canswicki: 1 can baby formula = 5 cans tuna fish Tunata: 1 can baby formula = 7 cans tuna fish a. In what product should each nation specialize? Canswicki should produce baby formula and Tunata should produce tuna fish b. Would the following terms of trade be acceptable to both nations? i. 1 can baby formula = 4 cans tuna fish: (Click to select) v iI. 1 can baby formula = 8 cans tuna fish: (Click to select) v es iII. 1 can baby formula = 5.5 cans tuna fish: (Click to select)Using the Heckscher-Ohlin trade model, we would expect that in a nation that is labor abundant that exports potatoes, an increase in the quantity of labor would... A) Worsen the terms of trade for that nation B) Improve the terms of trade for that nation C) Raise wages in that nation D) Both B and C
- Which of the following describe technical barrier to trade? Select all that apply. Government controls imposed on the flow of capital into or out of the country ☐ Two prospective trading partners being very distant from one another O Trading partners struggling to made trade deals because of the inability to communicate seamlessly and effectively ☐ Imposition by a country of a numerical limit on how much sugar can be imported under a low tariff ☐ Agricultural subsidies provided by the U.S. government to corn farmers Two countries agreeing to eliminate all tariffs on goods traded between themGiven the information as follows: Consider the following model of trade between Vietnam and France. Assume throughout that those two countries are the only two countries in the world, at least for purposes of trade. There are two goods: Rice and Beef. Consumers always spend 1/4 of their income on rice and the remainder on beef. The only factor of production is labor. Each Vietnamese worker can produce 2 unit of Rice or 1 unit of beef per unit of time, while each French worker can produce 1 units of rice or 3 units of beef per unit of time. There are 100 million workers in Vietnam and 70 million in France. a. Determine the product brings higher wealth to each country. b. Determine the pattern of trade for both countries using Ricardian model. Draw the world relative supply curve. c. What is the benefit of each country when joining international trade following Ricardian model? Draw the graph to clarify your idea.NAFTA is a trade agreement that was negotiated by the leaders of three countries. Which of the following countries was not part of this agreement? the United States Cuba Mexico Canada