This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: It is generally claimed that a movement from autarky to free trade consistent with Ricardian ... (Read 66 times)

ETearle

  • Hero Member
  • *****
  • Posts: 580
on: Jun 30, 2018
It is generally claimed that a movement from autarky to free trade consistent with Ricardian comparative advantage increases the economic welfare of each of the trade partners.
 
  However, it may be demonstrated that under certain circumstances, not everyone in each country is made better off. Illustrate such a case.

Question 2

Suppose Russia's inflation rate is 200 over one year but the inflation rate in Switzerland is only 2. According to relative PPP, what should happen over the year to the Swiss franc's exchange rate against the Russian ruble?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

tuate

  • Sr. Member
  • ****
  • Posts: 332
Reply #1 on: Jun 30, 2018
Answer to Question 1

(a) If inter-generational, or economic growth considerations are taken into account, then a country may end up specializing in a good that has no or few growth linkages with the rest of the economy (e.g., an enclave sector).
(b) If some of the residents of a country have tastes biased toward their exportable, then they may suffer due to the trade-affected increase in the market price of the exportable good.

Answer to Question 2

(Eruble/franc, t - Eruble/franc, t-1)/Eruble/franc, t-1 = 2 - 0.02 = 1.98
So there will be a 198 depreciation of the ruble against the franc or, conversely, a 198 appreciation of the franc against the ruble.


ETearle

  • Member
  • Posts: 580
Reply 2 on: Jun 30, 2018
Excellent

Jsherida

  • Member
  • Posts: 314
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

Interferon was scarce and expensive until 1980, when the interferon gene was inserted into bacteria using recombinant DNA technology, allowing for mass cultivation and purification from bacterial cultures.

Did you know?

There are approximately 3 million unintended pregnancies in the United States each year.

Did you know?

Blastomycosis is often misdiagnosed, resulting in tragic outcomes. It is caused by a fungus living in moist soil, in wooded areas of the United States and Canada. If inhaled, the fungus can cause mild breathing problems that may worsen and cause serious illness and even death.

Did you know?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

Movement of myosin-coated beads along actin filaments. Movement of myosin-coated beads along actin filaments.
A method to measure the lateral movement of membrane proteins. A method to measure the lateral movement of membrane proteins.
Water movement between capillaries and interstitial fluid. Water movement between capillaries and interstitial fluid.
Effects of Differences in Solute Concentration on the Movement of Water Molecules Effects of Differences in Solute Concentration on the Movement of Water Molecules
The basal ganglia are clusters of gray matter that control learned movement and are involved with ... The basal ganglia are clusters of gray matter that control learned movement and are involved with ...
Movement of acorns by blue jays allows gene flow between oak populations Movement of acorns by blue jays allows gene flow between oak populations
Video: Primary Active Transport - electrochemical gradient and ion transport / water movement

For a complete list of videos, visit our video library