Assignment:
Please read the following instructions carefully
The purpose of this project is for you to prepare a summaryreport on the paper by the Economist magazine.The links to these articles have been posted below. Please let me know if you have any issues accessing them. The paper you prepare should be structured in the following manner:
a. Summarise the main argument or thesis of the report. In effect, a precis.
b. Discuss in detail how the report incorporates (directly or indirectly) three key theories we have discussed in class. This is designed for you to understand how these theories are evident in practice.
There are the theories in class.
- The Stolper-Samuelson theorem demonstrates how changes in output prices affect the prices of the factors when positive production and zero economic profit are maintained in each industry . It is useful in analyzing the effects on factor income, either when countries move from autarky to free trade or when tariffs or other government regulations are imposed within the context of a H-O model.
- The Heckscher-Ohlin model is a theory in economics explaining that countries export what can be most efficiently and plentifully produced. This model is used to evaluate trade and, more specifically, the equilibrium of trade between two countries that have varying specialties and natural resources. Emphasis is placed on the exportation of goods requiring factors of production that a country has in abundance and the importation of goods that a nation cannot produce as effectively.
- Tariffs are used to restrict imports by increasing the price of goods and services purchased from overseas and making them less attractive to consumers. A specific tariff is levied as a fixed fee based on the type of item, for example, $1,000 on any car. An ad-valorem tariff is levied based on the item's value, for example, 10% of the car's value.
c. What are the implications of the developments mentioned in the articles to the global economy. Here you should present your opinion.
Attachment:- Reference.rar