How have the trade policies of developed countries discouraged new exports of less-skilled-labor-intensive manufactured goods by developing countries?
What will be an ideal response?
POSSIBLE RESPONSE: In part, the industrialized countries have made exports of manufactured goods more difficult for developing countries. They discriminated against exports of manufactures from developing countries. Nontariff import barriers apply to a larger share of goods from developing countries than they do for industrialized countries. As for tariffs, the rates are in principle nondiscriminatory. However, tariff rates differ by type of product. In general, the highest tariff rates among manufactures are on those goods in which the developing countries have their broadest comparative advantage.
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Trade theory suggests that Japan would gain from a subsidy the United States provides its grain farmers if the gains to Japanese consumers of wheat products more than offsets the losses to Japanese wheat farmers. This would occur as long as Japan
A) is a net importer in bilateral trade flows with the United States. B) is a net importer of wheat. C) has a comparative advantage in wheat. D) has an absolute advantage in producing wheat. E) is involved in intra-industry trade with the United States.
Assume that households and businesses deposit $10,000 in this bank and that this currency is added to the bank’s reserves. In column (1) show the bank’s balance sheet after this occurs. Is there a change in the money supply? In column (2) show what would happen if the bank now loans all of its excess reserves to a depositor. Is there a change in the money supply?
Suppose the Second National Bank has the following simplified balance sheet. The reserve ratio is 25%.
