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How would these transactions show up in the balance of payments accounts of New York and Ncw Jersey? What if the Ncw Yorker pays cash for the machine?
Why should the measure of imports used in the GNP accounts therefore be defined to include only imports of final goods and services from abroad?
Explain in terms of the envi-ronmental Kurncts cunt. How does the French proposal for a carbon tax on imports relate to the issue of pollution havens?
China was the tint to open up. Now that India is also opening up to world trade. How would you expect this to affect the welfare of China? Of the United States?
How does such tying of aid affect the transfer problem analysis? Does tying of aid make sense from the donor's point of view?
What about welfare in the two countries? Suppose, on the other hand, that the second country retaliates with an expon sub-sidy of its own. Contrast the result.
What is the equilibrium price of automobiles in the United States and Europe if the automobile industry is closed to foreign trade?
Suppose that demand and supply are exactly as described. Calculate the effects on the government's objective of a tariff of 5 per unit.
Why does the production subsidy produce a greater gain in welfare than the tarif? What would the prim, production subsidy be?
What would be the effect on the real income distribution within the economy if there were a substantial tariff levied on manufactured goods?
The United States simultaneously limit import of ethanol for fuel purpose. What is the effective rate of protection on the process of turning corn into ethanol?
What are some of the reasons that a country would prefer to open its own production plant overseas rather than to outsource manufacturing to an overseas firm?
In what sense could some features of such a policy be defended as a kind of strategic trade policy?
What are advantages and disadvantages of instituting higher labor standards in devel-oping countries?
What am the key assumptions that allow strategic trade policy to work effectively in the Brander-Spencer example of Airbus and Boeing?
If the United States had its way. it would demand that Japan spend more money on basic research. Explain why in terms of the analysis of appropriability.
What am the disadvantages of engaging in strategic trade policy even in cases in which it can be shown to yield an increase in a country's welfare?
What is the loss in national income if the manufacturing wage is set at 50. but there is full employment?
Explain how this can prevent development of a domestic industry and how infant industry protection can help.
Why shouldn't we restrict imports of goods that are produced with badly paid labor? Why is or isn't this argument valid?
What is the equilibrium solution to the game if governments formulate policy in this way? Would they ever choose the strategy of protectionism?
What can you say about the efficiency of world production and the division of the gains from trade between Home and Foreign in this case?
Graph the relative demand curve along with the relative supply curve. What is the equilibrium relative price of apples? Describe the pattern of trade.
What is the opportunity cost of apples in terms of bananas? In the absence of trade, what would the price of apples in terms of bananas be? Why?
Mexico trades mainly with the United States, Brazil trades about equally with the United States. Explain these differences using the gravity model.