World trade basics by using some relevant terms.

Question

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Answer 1

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 18, Problem 1AA

To determine

To show: World trade basics by using some relevant terms.

Expert Solution & Answer

Explanation of Solution

World Trade Organization (WTO) was established by removing the General Agreement on Trade and Tariff (GATT) in 1995 to improve the status of international trade by liberalizing the trade policies after reducing tariff barriers and by removing non-tariff barriers. It is supposed to promote imports and exports by removing import quotas and helping countries to expand their international trade by dumping goods in which countries have specialization. Thus, the idea of WTO was to put aside the ideology of ‘protectionism’ as protectionist countries oppose imports by levying high import duties even it can result in comparative cost advantage to the country. At present (2016), there are 164 member countries of WTO including China. In spite of member countries, China devalued its exchange rate to improve its balance of trade. Though, WTO aims to promote market forces to determine the exchange rate i.e., flexible exchange rate which allows the currency to appreciate or depreciate as per the demand and supply of that currency in the international market.

North American Free Trade Agreement (NAFTA) is an agreement that came into existence after Canada, Mexico, and the United States government created a trilateral trade policy on January 1, 1994. While the European Union (EU) is a confederation of 27 member states which are located in Europe. EU policies ensure the free movement of capital, goods, and services and maintain common policies on trade for regional development.

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Answer 2

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 18, Problem 1AA

To determine

To show: World trade basics by using some relevant terms.

Expert Solution & Answer

Explanation of Solution

World Trade Organization (WTO) was established by removing the General Agreement on Trade and Tariff (GATT) in 1995 to improve the status of international trade by liberalizing the trade policies after reducing tariff barriers and by removing non-tariff barriers. It is supposed to promote imports and exports by removing import quotas and helping countries to expand their international trade by dumping goods in which countries have specialization. Thus, the idea of WTO was to put aside the ideology of ‘protectionism’ as protectionist countries oppose imports by levying high import duties even it can result in comparative cost advantage to the country. At present (2016), there are 164 member countries of WTO including China. In spite of member countries, China devalued its exchange rate to improve its balance of trade. Though, WTO aims to promote market forces to determine the exchange rate i.e., flexible exchange rate which allows the currency to appreciate or depreciate as per the demand and supply of that currency in the international market.

North American Free Trade Agreement (NAFTA) is an agreement that came into existence after Canada, Mexico, and the United States government created a trilateral trade policy on January 1, 1994. While the European Union (EU) is a confederation of 27 member states which are located in Europe. EU policies ensure the free movement of capital, goods, and services and maintain common policies on trade for regional development.

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Answer 3

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 18, Problem 1AA

To determine

To show: World trade basics by using some relevant terms.

Expert Solution & Answer

Explanation of Solution

World Trade Organization (WTO) was established by removing the General Agreement on Trade and Tariff (GATT) in 1995 to improve the status of international trade by liberalizing the trade policies after reducing tariff barriers and by removing non-tariff barriers. It is supposed to promote imports and exports by removing import quotas and helping countries to expand their international trade by dumping goods in which countries have specialization. Thus, the idea of WTO was to put aside the ideology of ‘protectionism’ as protectionist countries oppose imports by levying high import duties even it can result in comparative cost advantage to the country. At present (2016), there are 164 member countries of WTO including China. In spite of member countries, China devalued its exchange rate to improve its balance of trade. Though, WTO aims to promote market forces to determine the exchange rate i.e., flexible exchange rate which allows the currency to appreciate or depreciate as per the demand and supply of that currency in the international market.

North American Free Trade Agreement (NAFTA) is an agreement that came into existence after Canada, Mexico, and the United States government created a trilateral trade policy on January 1, 1994. While the European Union (EU) is a confederation of 27 member states which are located in Europe. EU policies ensure the free movement of capital, goods, and services and maintain common policies on trade for regional development.

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Answer 4

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 18, Problem 1AA

To determine

To show: World trade basics by using some relevant terms.

Expert Solution & Answer

Explanation of Solution

World Trade Organization (WTO) was established by removing the General Agreement on Trade and Tariff (GATT) in 1995 to improve the status of international trade by liberalizing the trade policies after reducing tariff barriers and by removing non-tariff barriers. It is supposed to promote imports and exports by removing import quotas and helping countries to expand their international trade by dumping goods in which countries have specialization. Thus, the idea of WTO was to put aside the ideology of ‘protectionism’ as protectionist countries oppose imports by levying high import duties even it can result in comparative cost advantage to the country. At present (2016), there are 164 member countries of WTO including China. In spite of member countries, China devalued its exchange rate to improve its balance of trade. Though, WTO aims to promote market forces to determine the exchange rate i.e., flexible exchange rate which allows the currency to appreciate or depreciate as per the demand and supply of that currency in the international market.

North American Free Trade Agreement (NAFTA) is an agreement that came into existence after Canada, Mexico, and the United States government created a trilateral trade policy on January 1, 1994. While the European Union (EU) is a confederation of 27 member states which are located in Europe. EU policies ensure the free movement of capital, goods, and services and maintain common policies on trade for regional development.

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Answer 5

Chapter 18, Problem 1AA

To determine

To show: World trade basics by using some relevant terms.

Expert Solution & Answer

Explanation of Solution

World Trade Organization (WTO) was established by removing the General Agreement on Trade and Tariff (GATT) in 1995 to improve the status of international trade by liberalizing the trade policies after reducing tariff barriers and by removing non-tariff barriers. It is supposed to promote imports and exports by removing import quotas and helping countries to expand their international trade by dumping goods in which countries have specialization. Thus, the idea of WTO was to put aside the ideology of ‘protectionism’ as protectionist countries oppose imports by levying high import duties even it can result in comparative cost advantage to the country. At present (2016), there are 164 member countries of WTO including China. In spite of member countries, China devalued its exchange rate to improve its balance of trade. Though, WTO aims to promote market forces to determine the exchange rate i.e., flexible exchange rate which allows the currency to appreciate or depreciate as per the demand and supply of that currency in the international market.

North American Free Trade Agreement (NAFTA) is an agreement that came into existence after Canada, Mexico, and the United States government created a trilateral trade policy on January 1, 1994. While the European Union (EU) is a confederation of 27 member states which are located in Europe. EU policies ensure the free movement of capital, goods, and services and maintain common policies on trade for regional development.

Answer 6

Chapter 18, Problem 1AA

To determine

To show: World trade basics by using some relevant terms.

Expert Solution & Answer

Explanation of Solution

World Trade Organization (WTO) was established by removing the General Agreement on Trade and Tariff (GATT) in 1995 to improve the status of international trade by liberalizing the trade policies after reducing tariff barriers and by removing non-tariff barriers. It is supposed to promote imports and exports by removing import quotas and helping countries to expand their international trade by dumping goods in which countries have specialization. Thus, the idea of WTO was to put aside the ideology of ‘protectionism’ as protectionist countries oppose imports by levying high import duties even it can result in comparative cost advantage to the country. At present (2016), there are 164 member countries of WTO including China. In spite of member countries, China devalued its exchange rate to improve its balance of trade. Though, WTO aims to promote market forces to determine the exchange rate i.e., flexible exchange rate which allows the currency to appreciate or depreciate as per the demand and supply of that currency in the international market.

North American Free Trade Agreement (NAFTA) is an agreement that came into existence after Canada, Mexico, and the United States government created a trilateral trade policy on January 1, 1994. While the European Union (EU) is a confederation of 27 member states which are located in Europe. EU policies ensure the free movement of capital, goods, and services and maintain common policies on trade for regional development.

Answer 7

Chapter 18, Problem 1AA

To determine

To show: World trade basics by using some relevant terms.

Answer 8

Expert Solution & Answer

Explanation of Solution

World Trade Organization (WTO) was established by removing the General Agreement on Trade and Tariff (GATT) in 1995 to improve the status of international trade by liberalizing the trade policies after reducing tariff barriers and by removing non-tariff barriers. It is supposed to promote imports and exports by removing import quotas and helping countries to expand their international trade by dumping goods in which countries have specialization. Thus, the idea of WTO was to put aside the ideology of ‘protectionism’ as protectionist countries oppose imports by levying high import duties even it can result in comparative cost advantage to the country. At present (2016), there are 164 member countries of WTO including China. In spite of member countries, China devalued its exchange rate to improve its balance of trade. Though, WTO aims to promote market forces to determine the exchange rate i.e., flexible exchange rate which allows the currency to appreciate or depreciate as per the demand and supply of that currency in the international market.

North American Free Trade Agreement (NAFTA) is an agreement that came into existence after Canada, Mexico, and the United States government created a trilateral trade policy on January 1, 1994. While the European Union (EU) is a confederation of 27 member states which are located in Europe. EU policies ensure the free movement of capital, goods, and services and maintain common policies on trade for regional development.