International Economics (IEcoS (Economic Services) Economics Paper-2): Questions 1 - 8 of 8

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Question number: 1

» International Economics » Theories of International Trade

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Appeared in Year: 2018

Essay Question▾

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State and prove Stopler-Samuelson theorem of international trade. What is the magnification effect?

Explanation

  • The H-O theory determined that the labour- abundant country specializes in the export of labour- intensive commodity while capital-abundant country specializes in the export of capital-intensive commodity.

    • The theorem developed by Stopler-Samuelson stated that commencement of free international trade would benefit the relatively abundant fa

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Question number: 2

» International Economics » International Trade, Terms of Trade, Policy, International Trade and Economic Development

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Appeared in Year: 2010

Essay Question▾

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Meaning of Exchange Rate Risk.

Explanation

Exchange rate risk, also known as currency risk, is the financial risk arising from fluctuations in the value of a base currency against a foreign currency in which a company or individual has assets or liabilities.

  • Exchange rate risk may also refers to risk which an investor faces when they need to shut down a long or short position in a for

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Question number: 3

» International Economics » Theories of International Trade

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Appeared in Year: 2017

Essay Question▾

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State the assumptions of Hecksher Ohlin model and explain the role each assumption plays in the derivation of the main results of the model.

Explanation

According to this theory, countries which are rich in labour will export labour intensive goods and those rich in capital will export capital intensive goods.

Assumptions of the model:

  • It considers a two-commodity, two-country and two factors case. It takes into account labour and capital. It is possible to extend this to multi-commodity and

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Question number: 4

» International Economics » International Trade, Terms of Trade, Policy, International Trade and Economic Development

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Appeared in Year: 2010

Essay Question▾

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Explain Net Barter Terms of Trade. What are the limitations of this theory?

Explanation

  • The concept of net barter terms of trade was introduced by F. W. Taussig. This concept was called as commodity terms of trade by Jacob Viner.

    It is defined as ratio of export prices to import prices. It can be expressed as:

    • Here = commodity terms of trade or net barter terms of trade,

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Question number: 5

» International Economics » Theories of International Trade

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Appeared in Year: 2010

Essay Question▾

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“Despite merit, Hecksher Ohlin theory has some shortcomings”. Discuss.

Explanation

This theory is based upon highly over simplifying assumptions of perfect competition, full employment of resources, identical production function, and absence of transport costs. Because of these assumptions, this model becomes unrealistic.

  • This model assumes fixed quantities of factor of production, given the production functions, income and

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Question number: 6

» International Economics » International Trade, Terms of Trade, Policy, International Trade and Economic Development

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Appeared in Year: 2010

Essay Question▾

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What is Reciprocal Demand? Critically evaluate the reciprocal demand theory?

Explanation

By reciprocal demand, Mill meant the quantities of exports that a country would offer at different terms of trade, in return of varying quantities of imports. In other words, reciprocal demand refers to the intensity of demand for the product of one country in the other country.

  • Assumptions: (i) The trade takes place between two countries, A

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Question number: 7

» International Economics » International Trade, Terms of Trade, Policy, International Trade and Economic Development

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Appeared in Year: 2015

Essay Question▾

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Examine the effect of international trade on the difference in the factor prices ‘between nations’, and the effect of international trade on the relative factor prices and income ‘within’ each nation.

Explanation

  • According to this theory, countries which are rich in labour will export labour intensive goods and those rich in capital will export capital intensive goods.
  • Assumptions of the model:

    • It considers a two-commodity, two-country and two factors case. It takes into account labour and capital. It is possible to extend this to multi-commodity a

… (696 more words) …

Question number: 8

» International Economics » Theories of International Trade

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Appeared in Year: 2016

Essay Question▾

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Explain and derive foreign trade multiplier.

Explanation

The foreign trade multiplier, also known as the export multiplier, operates like the investment multiplier of Keynes. It may be defined as the amount by which the national income of a country will be raised by a unit increase in domestic investment on exports.

  • In a country, an increase in exporters’ income will stimulate them to expand their

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