International Economics-International Trade, Terms of Trade, Policy, International Trade and Economic Development (IEcoS (Economic Services) Economics Paper-2): Questions 1 - 4 of 4

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Question number: 1

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

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

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: 2

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

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

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: 3

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

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

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: 4

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

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Appeared in Year: 2015

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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

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