Does the presence in the real world of intraindustry trade prove or disprove the classical or Heckscher-Ohlin models? Explain
What will be an ideal response?
It does not disprove these theories, but it does present difficulties. Clearly, both theories would seem to imply that trade should be interindustry. Some intraindustry trade can be explained by transport costs or by data classification problems. The intraindustry trade that remains suggests the need for broader theories that incorporate such factors as increasing returns to scale and goods that are imperfect substitutes.
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The fertility rates—the number of children per woman's lifetime—in many DVC (developing countries) are:
A. Rising slowly B. Rising fast C. Staying constant D. Declining
Which scenario has a higher present discounted value (assume interest is compounded annually); $100 received in 3 years if the interest rate is 8% or $90 received in 2 years if the interest rate is 7.25%?
A. $100 owed in 3 years B. $90 owed in 2 years C. Both scenarios have the same present discounted value. D. It cannot be determined with information provided.