Economics

It may be argued that Japan’s explicit promotion of its microchip indu

It may be argued that Japan’s explicit promotion of its microchip industry was an excellent example of successful industrial policy. What criteria would you apply to determine whether such a policy is or is not successful? Judging from your own stated criteria, was Japan’s exercise successful? Why or why not? What information would a government […]

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Date: September 10th, 2020

Intra-industry trade will tend to dominate trade flows when which of t

Intra-industry trade will tend to dominate trade flows when which of the following exists? A) small differences between relative country factor availabilities B) large differences between relative country factor availabilities C) homogeneous products that cannot be differentiated D) constant cost industries E) uneven distribution of abundant resources between two countries   ANSWER A

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Date: September 10th, 2020

The experience of sub-Saharan Africa, as compared to that of “Other As

The experience of sub-Saharan Africa, as compared to that of “Other Asia” (not including the HPAEs) supports the argument that A) high rates of protection tend to harm economic growth. B) the poorer is the country the easier it is for it to “catch up” economically. C) low rates of protection tend to promote economic […]

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Date: September 10th, 2020

It is generally claimed that state trading, or centrally controlled tr

It is generally claimed that state trading, or centrally controlled trading will tend to reach a lower economic welfare than would be reached by allowing market forces to determine trade flow directions and terms of trade. Illustrate a counter-example to this proposition.   ANSWER In general, if we begin with any suboptimal distortion, the theory […]

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Date: September 10th, 2020

The WTO seems at times to be interfering in domestic policy since A)

The WTO seems at times to be interfering in domestic policy since A) the line between domestic policies and de factor protectionism is often fuzzy. B) it is a supra-national organization with the power to overturn governments. C) it determines which nations may trade what with whom. D) it punishes naughty nations. E) it exempts […]

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Date: September 10th, 2020

We often observe “pseudo-intra-industry trade” between the United Stat

We often observe “pseudo-intra-industry trade” between the United States and Mexico. Actually, such trade is consistent with A) comparative advantage associated with Heckscher-Ohlin model. B) oligopolistic markets. C) optimal tariff issues. D) the Ricardian model of trade. E) the specific factors model of trade.   ANSWER A

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Date: September 10th, 2020