If a local government is willing to provide a plot of land and buildings for an incoming FDI, the local incentives. government is focusing on Financial O Non-financial Fiscal None of the above
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- Cooperton and Denalla each produce two products; pots and pens. The table shows the productlon possibilitles for each country. Cooperton Denalia Pots Pens Pots Pens 6,000 4,500 100 4,000 50 3,000 200 2,000 100 1,500 300 200 Which of the following terms of trade would be beneficlal for both countries? O 1 pot trades for 25 pens O 1 pen trades for 1/18 of a pot 1 pot trades for 15 pens O 1 pen trades for 1/22 of a potConsider a small country that exports steel. Supposethat a “pro-trade” government decides to subsidizethe export of steel by paying a certain amount foreach ton sold abroad. How does this export subsidyaffect the domestic price of steel, the quantity ofsteel produced, the quantity of steel consumed, andthe quantity of steel exported? How does it affectconsumer surplus, producer surplus, governmentrevenue, and total surplus? Is it a good policy fromthe standpoint of economic efficiency? (Hint: Theanalysis of an export subsidy is similar to the analysisof a tariff.)According to the open-economy macroeconomic model, import quotas increase which of the following O a. net exports and net capital outflow O b. net exports but not net capital outflow. O c. net capital outflow but not net exports. O d. neither net exports nor net capital outflow.
- Tariffs have mixed implications for citizens depending on their industry and position within it. Thepoor are disproportionally impacted by tariffs as they are considered economically regressive. amongthe arguments for trade barriers are job creation, protection against cheap foreign labor, fairness in trade, maintenance of the domestic standard of living, equalization of production costs, infant-industry argument, and various non-economic arguments. Tariff-related gains for America are a complex issue. Discuss the effective rate of tariff protection and the process of tariff escalation? Explain how a tariff affects the welfare of a small importing country and a large importingcountry?Suppose Egypt wants to open its trade borders tothe world market for natural gas. What will determine whether Egypt becomes a net-exporter ornet-importer of natural gas? If Egypt becomes anet-exporter, will domestic supply be equal to, lessthan, or greater than domestic demand?QUESTION 17 P 100- 50- 65 26 25- h f 25 30 50 6575 a+b+c+d+f+g. k O a+b+c+d. Soomestic Sworld The above figure shows the market for rice in Japan. SDomestic represents the domestic supply curve, and Sworld represents the world supply curve. If imported rice is banned, the consumption distortion loss is equal to Of+g. Oa+c+f+g Doomestic
- When countries specialize in the production of goods they have the comparative advantage in, both and will increase O prices, the trade deficit O production, consumption price level, unemployment consumption, unemploymentForeign Direct Investment results in the following benefits: Select one: O a. Tax efficiency O b. Increase the economy's stock of capital O c. Higher productivity O d. Increase the economy's stock of capital AND Higher productivitydetermine the purchasing power of the country China for aconsumer good that they would buy from their Canadian trading partner. Also, calculate whatCanada’s purchasing power is with a country that they import from. See example below on Coca Colaand Mexico. Purchasing Power Example In the example of the picture, if a Canadian company operating in Mexico were to pay its Mexican employeesthe equivalent of $10/hour CAD (or 100 pesos/hour according to our fictional exchange rate), theMexican employee would actually enjoy greater purchasing power (the ability to acquire 20 colasversus only 10 colas) than his/her Canadian counterparts.
- The nation of Bermuda is “small” and assumed to be unable to affect world prices. It importsstrawberries at the price of 10 dollars per box. The Domestic Supply and Domestic Demand curvesfor boxes are:S = 60 + 20PD = 1160 − 15P(a) Assume Bermuda is Completely open to trade. how much is imported?An export subsidy always makes a country worse off on net. O True O FalseIn 38 low-income and emerging economies with GDP per capita below $25,000 tracked by World Bank, the induced terms of trade movements accounted for fluctuations on average for all those countries. O 20 percent of GDP O 40 percent of GDP O 30 percent of GDP O 10 percent of GDP