Economic Sanctions And International Institutions With An...

Economic Sanctions And International Institutions With An...
Economic sanctions provide states and international institutions with an invaluable instrument of
coercion. Without having to resort to violence, at least in the traditional sense, states can gain
concessions and compliance from the target state. Economic sanctions are, however, not always
successful. An analysis of 204 cases of implemented economic sanctions, from the start of the Cold
War to 2000, revealed that economic sanctions were "at least partially successful" a mere 34% of the
time (Hufbauer). While all economic sanctions have financial implications, there is a distinction to
be drawn between economic sanctions–which include both trade and financial sanctions–and
financial sanctions, as a standalone term. Financial sanctions can be defined as "restrictions that
limit the provision of certain financial services or restrict access to financial markets, funds and
economic resources in order to achieve a specific foreign policy or national security objective"
(Office of Financial Sanctions Implementation HM Treasury). As the international financial system
has become more globalized, and as a result more difficult to avoid while engaging in practically
any form of economic transaction, the efficacy of financial sanctions has increased over more
traditional forms of economic sanctions. Modern financial sanctions also have the added benefit of
being more precise than their alternatives. This enables initiator states to institute sanctions in a
more stylized manner and
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International Economics The Current Account Deficit Australia
In relation to International Economics the current account deficit Australia has, has been of some
debate in recent years. The current account is the summation of the balance of goods and services
and net income and is a component of the balance of payments alongside the capital and financial
account. When a deficit occurs in the current account it means that the value of imports (debits) are
exceeding the value of exports (credits). The value of the current account has oscillated between the
period 2008 to current, however despite these oscillations it has remained a deficit during this period
of time. Although a short–term CAD may not necessarily be detrimental to the Australian economy,
potentially boosting economic growth beyond its ... Show more content on Helpwriting.net ...
Graph 1 shows the trend in the Current account deficit (Economics Update, 2012).
Graph 1
The net primary income is the prevalent contributor to the Current account deficit. The servicing
costs (interest on debt and dividends on shares) on Australia's foreign liabilities are what
predominantly comprise the net primary income deficit. Over the last 20 years the net primary
income deficit has averaged –3.3% of GDP. By December 2011 this increased by 0.1% to –3.2%. of
GDP. Imports and exports encompass what is the Balance of Goods and Services (BOGS). From
2008–09 and 2010–11 the BOGS recorded a surplus of Goods and Services. From 2012–13 the
BOGS recorded a deficit, however from 2013–14 the BOGS entered a surplus again despite the
CAD remaining in a deficit (Graph 2) (Economics Update, 2012).
Graph 2
The current account is affected by both short term factors and long term factors. Periods of
consumer led economic growth, identified by higher consumer spending, particularly on imports
will cause a deficit in the current account. Recessions, on the other hand, lead to improvements and
surpluses. (Pettinger, 2011). The impact of the GFC since 2008 has led to a temporary improvement
in the deficit as consumers cut back on spending (Graph 3).
Graph 3 Exchange rates also impact on the current account balance. A depreciation in the exchange
rate

GDP Problem Sets and International Economic Indicators
1. The accounting identity for GDP is as follows: C+I+G+X–M=GDP Thus, we have the following
calculation: 1000 + 200 + 250+ 100 = 1550 2. The effect on the GDP of increasing domestic energy
production depends on what assumptions go into this. The easiest assumption is that the increase in
domestic production will result in an equivalent reduction in imports. This would result in no net
change to the GDP. However, with domestic production all of the value that goes into that
production would stay in the country, whereas with imports some of the value of that production
goes outside the country. For example, the cost of barrel of foreign oil includes factors like shipping
costs and producer markups that inflate the cost of the imports. In all likelihood, domestic energy
sources, if viable, would be most cost effective. Under that assumption, M would decrease faster
than I would increase. Thus, there would be a net gain to the GDP from switching to domestic
energy production. Inflation 1. 111/106 = 4.7% 2. 234/217 = 7.8% Unemployment 1. 2500 / 30,000
= 8.33% 2. 2500 / (30,000 500) = 8.47% Yield Curve 1.b.Maturity risk premiums. The increase in
the yield for the bonds corresponds with the longer maturities. Therefore, in all likelihood the
premium reflects increased risk for bonds with a longer time frame. 2. d. The default risk premium
is added to all bonds, including US government bonds, at least in theory. For example, when the US
received a downgrade last year,

Facets And Trends Of International Economic Cooperation
Ward Westray
Professor Skidmore
POLS 126
23 September 2014
Facets and Trends of International Economic Cooperation International trade is an often–vexing
field of study. The breadth of its scope, and the multitude of political, socio–economic, and strategic
components that influence its inputs and outputs, can seem staggeringly huge, frustrating attempts to
narrow in on and accurately study a select topic. One commonly observed trend is that of economic
globalization, the phenomenon wherein countries' economic situations, bolstered by increased
international economic cooperation, can become significantly dependent on other countries. Despite
its seemingly inexorable nature, however, globalization – and international economic cooperation in
general – is not a fixed variable in international affairs, nor has it ever been. Many kinds of factors
play a large role in determining the success or failure of efforts to organize international
cooperation. On the domestic level, these chiefly consist of public influence and economic and
developmental circumstances, while on the international level, factors including state sovereignty
and political systems and institutions are highly influential. The worldwide existence of domestic
sector–inclined protectionist tendencies and international competitiveness, each to various degrees,
will undoubtedly continue in the future; however, the interconnectedness of international economic
cooperation, bolstered by international institutions,

International Economics, Cause Trade Restrictions
1. Introduction to Trade Policy.
When trading in an international market, a company must understand the ways, countries can
interfere with trade. These trade barriers, according to Kishore Kulkarni's book on International
Economics, cause trade to "diverge from the comparative advantage pattern" (pg.266). David
Ricardo's comparative advantage "is an economic law that demonstrates the ways in which
protectionism is unnecessary in free trade" (pg.145). This section will provide an in–depth look at
the trade restriction known as a tariff.
Tariffs are a part of life for anyone attempting to trade internationally. This raises a question; why do
countries restrict trade in the first place? There are three legitimate reasons why tariffs might be
used. The first has to do with protecting a new industry; this is known as an infant industry.
According to Richard T. Froyen's book on Macroeconomics Theories and Policies, an infant
industry is "one that is too underdeveloped to achieve comparative advantage or perhaps even to
survive in the global environment" (pg.350). Such an industry may be small and "undercapitalized"
to survive without government intervention. This political intervention would be achieved through
tariffs, quotas, or subsidies. The next argument against free trade is known as the national defense
argument. In short, this argument would be applicable during a crisis; attempting to protect
important domestic industries, ensuring their products is well established.

International Economic Dimensions Of Nutrition Essay
University of Zambia
Great East Road, Main Compass
P. O. Box 32379
LUSAKA
Computer Number: 2016145282
Student Name: Idah Chama Mulenga
Course of study: MSc. Human Nutrition
Year of study: 1st Year
Course Name: Socio–economic Dimensions of Nutrition
Course Code: 6410
Assignment Number: Second
Lecturer: Dr. Keiron Audain
Due date: 23rd December, 2016
Assignment Question: With a focus on food security, what are the pros and cons of free trade?
Food security is defined as when "all people at all times have access to safe nutritious food to
maintain a healthy and active life" (FAO 2003). Therefore, the importance of food security is to the
general welfare of the population as a public health and nutrition benefit.
Free trade can be defined as a market model in which trade in goods and services between or within
countries flow unhindered by government–imposed restrictions such as taxes, duties, tariffs, or
subsidies (Kimberly A. 2016). Therefore, free trade reduces or eliminates counterproductive barriers
to competition, that limit access and competition on exports and imports between trading partners.
Free trade is a vital part in food security and it should be analyzed critically in order to make food
security a reality for all people.
1. Advantages of Free Trade
There are several advantages that come with free trade in relation to food security:
a. Promotes innovation and competition
According to Denise H. Frowning (2000), free

The Correlation Between The Economy And The International...
Introduction The United States of America 's economy has been on the decline for several years
although there has not been much official acceptance of the relative decline. This decrease has in no
doubt put a lot of pressure on the development and sustainability of International Financial
institutions. This paper discussed the perceived/relative decline, the development of some of the
international economic institutions, the difficulties faced by these establishments when setting them
up. The paper will also look at the correlation between the US economy and the International
Economic Institutions.
Discussion
"The first "decline" of the U.S. economy occurred" (Dezhao, 2006) back in the 1930s during the
capitalist world 's great economic ... Show more content on Helpwriting.net ...
2008).
The U.S. economy for sure remains high and will see a relatively long period of development due to
the emergence of fresh scientific and technological innovations. As previously stated, the third
"decline" of the US economy occurred in 2008/9, the international financial crisis. The century–rare
global financial crisis and world economic recession originated from the US.
The United States at this stage was the world financial centre and sole superpower in the world
(arguably). Once again the US was the creator of the crisis.
Mid–September to late October 2008 – Leman Brothers Holding Inc., the third largest investment
bank in the United States announced its bankruptcy ( Swedberg, 2008). Goldman Sachs as well as
Morgen Stanley; the top two American investment banks have transformed into holding companies
of banking corporations. By this time, all the top 5 investment banks of the US had collapsed.
Washington Mutual Inc. America 's largest savings and loans bank got overtaken by the Federal
Deposit Insurance Corporation (FDIC) and became the largest bank going bankrupt in American
history. Large commercial banks such as Bank of America, Citibank and JPMorgan Chase & Co.
suffering from losses and their stock prices shrinking by big margins were also in imminent danger.
The US economy has long been the pillar of most global economic institutions. The US economy is
the backbone of the IMF, World Bank among other major financial institutions. The

A Nation 's Economic Success And International...
A nation's economic success and international competitiveness depends upon the policies it set.
These policies are dependent on a variety of factors such as foreign direct investment and trade.
According to Phillips et al (2006), the global financial platform has been showing transitional
change over the last two decades in which foreign aid as a source of capital flow is drying up.
Markusen and Venables (1998) explained that financial institutions like the IMF and the World Bank
on their own are feeling the strains of meeting the financial demands of especially developing
countries. In this respect, economic policy makers in governments of both developing and
developed economies take great strides in attracting capital inflows ... Show more content on
Helpwriting.net ...
FDI plays in the economic growth process of the host country. A good number of the studies and
discussions show that there exists a strong correlation between FDI and economic progression. In
addition to being an engine for diffusion of knowledge and transfer of technology, FDI also
stimulates international trade, domestic investment, expands host nation 's domestic savings, and
increases the host country 's foreign exchange reserves adjusting its Balance of Payment post. These
factors increase the economic growth of the host nation. Exports are also regarded as a means of
economic growth. They facilitate production of goods and services efficiently by exploiting and
attaining a competitive advantage over other nations. The success stories of East and South East
Asian countries such as Singapore and Malaysia suggest that foreign direct investment is a powerful
tool to promote export for the host country. Grossman and Helpman (1993) explain that a number of
investigations confirm that FDI through MNCs (multi–national corporations) offer greater merit
over local companies in regard to export performance. These MNCs bring intangible assets such as
technology, brand names, and skills, globally proven strategies in marketing, advertising strategies,
and international

International Economics And World Politics
Introduction: The lives of people are impacted by international economics and world politics. What
is an International Political Economy? The international political economy is how economics and
politics intertwine. "These are both very important aspects of international relations and have
become more important internationally in recent years because of increased levels of trade,
economic interdependence between countries, and the growing impact of international economics
on domestic economics."( International Politics P.312)
How are Economics and Politics interconnected? International economics and world politics are
interconnected and economic factors like trade and tariffs, economic growth or recession,
fluctuating or stable currency ... Show more content on Helpwriting.net ...
The North is a creditor, the South is a debtor. The North has a low population growth and high
living standards where as the South has a high population growth and low living standards due to
poverty. The North has political stability where the South has political instability. The North has
many multinational corporations, and the South has multinational corporations from outside the
LDC's. The North has a developed structure for banking and education and the South has a weak
structure and weak systems and institutions. The North has regional cooperation and moderate
nationalism, and the South has regional conflict and very harmful nationalism. The North has
surplus goods and services, where as the South has subsistent economic systems. The North has
mostly democracies, and the South has mostly dictatorships. This gap seems to still exist between
the North and the South countries, and in some cases it seems to have even grown.
B. Explain how the widening gap can be narrowed? The widening gap can be reduced through
several factors. The first of these factors is increased trade, it is obvious that in most places in which
people live, international trade is evident in the things that we use everyday. This affects our
immediate environment, provides us with improved technology, and most resources. It is impossible
to relate international politics and economics without considering and accounting for their mutual
contributions, and trade plays such a major

Test Bank: International Economic
Sovereignity– supreme & independent power or authority in government as possessed or
claimed by a state or community. Being sovereign nations can be more indifferent to the interests of
others. As long as nations exist, international economics will always need a separate body of
analysis distinct from the rest of economies.
Globalization– worldwide integration & development; extending to other or all parts of the
world
Euro Benefits * Low interest rates due to a high degree of price stability * More price transparency
* Removal of transaction costs * No exchange rate fluctuations
Disadvantages
* Lack of strong Federal government * Two speed economies * To raise or lower interest rates * ...
Show more content on Helpwriting.net ...
If a consumer would be willing to pay more than the current asking price, then they are getting more
benefit from the purchased product than they spent to buy it. The difference in the price that they
would pay, if they had to, and the amount that they pay now is their consumer surplus. Allows us to
quantify what the lower price is worth to consumers.
Arbitrage– buying something in one market & reselling the same thing in another market to
profit from a price difference
Effects of consumers & producers– for the U.S (importing country) the shift from no trade to
free trade lowers the market price U.S consumers benefit from this change & increase their
quantity consumed.
Comparative advantage– a nation, like a person, gains from trade by exporting the goods or services
in which it has its greatest comparative advantage in productivity and importing those in which it
has the least comparative advantages
Production possibility curve– shows all the combinations of outputs of different goods and that an
economy can produce with full employment of resources & maximum productivity. Pictures
the production side of a country's economy.
Indifference curve– shows all the consumption points at which utility equals some constant. Each
indifference curve is typically presumed to have a bowed shape.

A country 's factor endowment is commonly understood as the amount of land, labor, and capital
that a country possesses

Regional Economic Integration : International Trade Area
Regional economic integration has allowed countries to concentrate on issues that pertain to their
respective stages of development, in addition to encouraging trade between neighbors. There are
five main stages of economic integration: Free trade area, customs union, common market,
economic union and political union. Free trade areas exist as the most basic type of economic
cooperation. Here, member countries remove all trade barriers but remain free to determine their
own trade policies with nonmember nations. An example of this is the North American Free Trade
Agreement (NAFTA). Customs unions are similar to free trade zones in that they provide economic
cooperation, along with the elimination of trade barriers among member countries. The primary
difference from the free trade area is that trade with nonmember countries are treated in a similar
fashion as trade with member countries. An example of this is The Gulf Cooperation Council
(GCC). Common markets exist to create economically integrated markets between member
countries. Trade barriers are removed, in addition to any restrictions on the capital and labor
movement between member countries. Similar to customs unions, there is a common trade policy
with nonmember nations. The primary advantage to workers is that a visa or work permit is not
required for employment in another member country of a common market. An example is the
Common Market for Eastern and Southern Africa (COMESA). Economic union is created when

International Trade Is An Effective Stimulation Of...
Engaging in international trade is an effective stimulation of economic growth. David Ricardo's
principle of comparative advantage argues while nations involved in international trade, a country
will become specialised in producing a product that has the lowest relative costs. (Economist, 2015)
By focusing on the production onto a limited scope of product or industries, firms or the nation will
experience rise in productivity due to higher efficiency in allocation and utilisation of resources. As
the process of specialisation will cause reallocation of other less efficient resources, nations, as a
result, will import products that are less efficiently produced from other countries. While different
nations specialising in different goods and services, a greater variety and cheaper products will
become available for consumption, improving the quality and quantity of consumption by all
nations. To determine whether developing nations are experiencing disadvantage in the international
trade, it requires a careful examination with Porter's Diamond factor endowments. It analysis a
nation 's competitiveness under four categories: factor endowments, demand condition, related and
supporting industries and firm strategy, structure and rivalry.
Factor endowments meaning the availability of resources and skills, which can further categorise
into basic and advanced factor. To fully utilise the potentials within a nation (Basic factor), it
requires policy set by different parties such

Statement Of Purpose For International Business Economics
My long fascination in economics subject has fueled the intense desire to chase my life target as an
economics analyst in public or private sector, into which I am willing to devote my fullest potential.
I believe that all the achievements during my undergraduate studies all focus on my target and will
surely contribute a lot to the development both in my further education and professional career,
leading me closer to my dream step by step. Therefore, I would like to apply a place in MSc
Economics at Durham University.
The four years undergraduate studies in International Business Economics at University of
Nottingham Ningbo China have familiarized me with the basics of statistics, calculus, accounting,
and financial management, which help me to identify factors that will influence the company
operation from both macroscopic to microscopic perspective. I am particularly ... Show more
content on Helpwriting.net ...
The most unforgettable experience is the Fund Manager Assistant Intern at Ningbo Branch of
Haiyin Investment and Fund Management Company, a public company with 5 hundred million
RMB registered capital. The intern truly provides opportunities for me to acquire practical
knowledge in investment and fund. For example, I am familiarized with the background knowledge
and different types of securities and fund, such as ETF, LOF and QDII. With this understanding, I
managed to handle a series of enquires, offer solutions and compare and contrast different financial
products for clients. I have learnt how to explain the risk and profit to clients in plain language.
Because of my excellent performance of closing the deal of 3 million, I was selected to share my
experience to may peers. In addition, I learnt to do policy related research, market research,
macroeconomics trends analysis and industry analysis, using finical models such as DDM, DCF and
FCED model to evaluate the target

Personal Statement For International Economics
Personal Statement
Worst financial crisis hit Indonesia's economy in 1997 to 1998. It caused instability in currency
values, resulting Indonesian Rupiah depreciated to lowest level at 82.9% and low–level of
competitiveness. This crisis had me to devote my interest to take International Economics as my
education at the Faculty of Economics and Business of University of Indonesia. At my university
time, I identified that exchange rate variability had a negative effect on trade and intermediate goods
was one of key solutions to boost international trade.
My interest on international economics more emerged when I did an internship at Central Bank of
Indonesia as Researcher in June 2006. During the internship, I performed monetary, financial and
banking researches and prepared papers using economic and statistical tools for preparing validation
and recommendations to senior management. I utilized this opportunity to enrich my modality for
writing Internship Report – equalled to thesis – which it had me been awarded as the best Faculty's
internship programme in 2007. At the same time, I was also an Assistant Lecturer at my faculty for
the subjects of Statistics and Monetary Economics. The subject of Statistics had developed my
logical and mathematical framework toward solving economic and financial problems. In addition,
teaching Monetary Economics ... Show more content on Helpwriting.net ...
My long–term goal is to work in a position that enables me to direct and make strategic decisions in
the public, private and non–profit sectors. These goals will lead me to bridge the gap between
national competitiveness and international trade market within the changing trade and financial
environments. I also dedicate myself to give significant contribution to Indonesian Government
institutions, national and multinational enterprises in facing current globalization, trade openness
and economic

International Business And Economics Research
over the online competitors permitting local customers the ability for a more conventional shopping
experience, to inspect garments before committing to a purchase. A professional tailor and T–shirt
printer are trading within the establishment for any immediate alterations or printing requests. The
custom made items and imported clothing lines aren 't likely to be seen or found on the high–street.
There has already been interest shown via social media accounts and blogs from members of the
public to place orders and purchase items from the website once it is trading and stock is available.
4.5 Company Ethics Models used to advertise the products aren 't perceived to be abnormally
underweight like the majority of cutting–edge fashion designers, thus promoting body confidence
for the average consumer and not encouraging eating disorders. The use of real fur requires
chemicals to keep them from decomposing and production pollutes the environment and can use up
vital resources. The fact that real fur causes millions of animals to suffer every single year there are
synthetic alternatives using more affordable imitations, promoting eco– and animal–friendly ethical
issues.The International Business & Economics Research Journal outlines how the outbreak of the
internet have had a considerable impact on the fashion industry, the findings of this study revealed
factors that determine consumer behaviour with regards to the rise in e–puchase 's that is forming a
substitute to the

Financial Globalization : The International Economic System
The financial globalization is growing nowadays and it is important to know what its causes are and
how they influence the world's economics or one of the separate countries.
The main area of globalization is the international economic system (economics), i.e. global
industry; the exchange and consumption done by the enterprises in their national economies and in
the world market. As a result of the globalization, the financial capital gained the considerable
mobility, seeking for the most attractive and profitable opportunities. Financial globalization has
increased the influence of international markets on the operations of lending and borrowing by the
residents of different countries. This process has led to the growth of the international network of
financial institutions and corporations, and to fundamental changes in their systems of organization
of flows of funds management. At the same time, the financial globalization seriously affects
different countries, as the competition of national economies for credit resources, which are freely
reallocated on the scale of the new global world economy, becomes tougher in new conditions. As
for this paper, the focus lies in arguing that microeconomic principles were applied to promote
recovery in South America, Poland, India, and Russia, since it proved to be the only way to stabilize
the decaying economics of the abovementioned countries.
Considering the microeconomic policy prescriptions, it is worth saying that Russia

Disadvantages Of International Economic Help
International institutes such as world bank are concerned deeply with a country's economic stability
and prosperity. Any country which collaborate with world bank or
IMF has vital economic problems, so, practically the usability of loans is indicated to countries
which face financial or liquidity problems. On exchange, they give back the provided funds in an
elastic manner of time, usually after a decade of a grace period, lasting for nearly 35 years
depending on the circumstances. People who control such organisations and manage the provided
capital target in the enhancement of a country's economy in parallel with drastic reformings which
are supposed to provide a great development. Distinguished economists and technocrats advise
government ... Show more content on Helpwriting.net ...
Greece have passed through these disadvantageous results of economic help. The disadvantages of
the economic help is the outcome of low performance and adjustment loans that have to be repayed
in a short period of time due to the strict policies of the signed memorandum which takes place in
the the agreement between the country and the creditors. If creditors acted more responsibly and
with pure solidarity, then the quintessence of the agreement would tend to have the initial principles
and goals of IMF, world bank or any respectfull nonprofit economic organisation that is the
prosperousness and progress of all people. As far as the ensurance of the repayment is concerned,
economists should evaluate the process of the funding with strict policies and laws that have to be
voted from the government in order to protect the agreement but these policies should be
examinated very carefully, because

International Economics Paper : Wal Mart Essay
International Economics Paper
Name
Institution
Outline
1. Introduction
2. President and Congress
3. The Federal Reserve
4. What motivates policymakers to stimulate or contract the economy?
5. Effect of Strength of other Economies on the Organization
6. Recommendations
7. Conclusion
8. References
Introduction Wal–Mart is an American–based retailing company that has ventured into the
international market with the aim of taking over some of the emerging markets across the globe. The
company has dominated the local market in the United States, and it is looking to dominate the
international market by providing consumers with some of the cheapest alternatives to the products
purchased on a daily basis. It follows that Wal–Mart is among the companies that are always
complaining when the economy of the United States weakens. A weaker dollar lowers the profit
margins of the company because its supply chain is based overseas; hence, the purchasing power of
the company decreases. This implies that when the economy is weak, Wal–Mart spends more dollars
to acquire products. This paper looks into some of the fundamental principles applied by the
authorities to stimulate or weaken the economy, with a close focus on the effects of these strategies
on Wal–Mart.
President and Congress The president and Congress stimulate the economy by employing short–
term measures, which mainly involve momentary fiscal expansion. The president and Congress
propose the

Notes On Economics And International Trade Theory
1. Scarcity: Insufficiency or shortness of supply; dearth.
2. Opportunity Cost: The money or other benefits lost when pursuing a particular course of action
instead of a mutually–exclusive alternative
3.Supply: The quantity of a commodity that is in the market and available for purchase or that is
available for purchase at a particular price.
4. Demand: The desire to purchase, coupled with the power to do so; the quantity of goods that
buyers will take at a particular price.
5. Price: The quantity of payment or compensation given by one party to another in return for goods
or services.
6. Absolute Advantage: An economy can produce a good for lower costs than another. It means that
less resources are needed to produce the same amount of goods.
7. Comparative Advantage: The benefit or advantage of an economy to be able to produce a
commodity at a lesser opportunity cost than other entities is referred to as comparative advantage in
international trade theory.
8. Import: A good or service brought into one country from another. Along with exports, imports
form the backbone of international trade. The higher the value of imports entering a country,
compared to the value of exports, the more negative that country 's balance of trade becomes.
9. Export: A function of international trade whereby goods produced in one country are shipped to
another country for future sale or trade.
10. Free trade: Also called laissez–faire, a policy by which a government does not

Features of the International Economic Environment
.1 An analysis of the features of the international economic environment The features of economic
environment have direct relationship with economic activities .Income and wealth is the
components of the economic environment. The international business of a country is greatly
influenced by the technological development. The technology environment ensures better
productivity. Technological environment influences the business and the effects of technology on
markets are very much important (Helpman and Krugman, 1985). Social environment is very
important to perform business in foreign countries. This kind of environment has great impact on
business policies of a country. This environment determines a business organization's future. To do
business effectively in a foreign country a person has to get perfect knowledge about social
environment. Political environment is significant to do business in other countries. There are
different factors of political environment. These factors can influence the government decision
making and other activities. For foreign investors every country set some rules and regulations.
Investor need to maintain these rules and regulation to do business on certain country. Political
factors can influence the government to change these regulations. So investors need to know the
regulations and get the proper knowledge about political environment. The features of international
economic environment are complex in structure. There are different aspects

The Economics International Baccalaureate Course Analysis
Hoffman
6
Ben has made a confident start to the Economics International Baccalaureate course and has proved
to be an enthusiastic and highly motivated student who has an excellent grasp of the key economics
concepts and issues being studied. I have been impressed by his mature and determined approach to
his studies and his awareness of the complex economic interrelationships in the world. He can build
on these grades by more in–depth critical analysis and by more effective use of economic theory and
real world examples. Wider reading will help broaden his background knowledge. The economics
examination
Economou
7
Alexei has made a confident start to the Economics International Baccalaureate course and has
proved to be an adept student who ... Show more content on Helpwriting.net ...
Just listening in class is not enough to build the understanding and depth of evaluation that is
needed. He can build on these grades by more in–depth critical analysis and by more effective use
of economic theory and real world example. I urge Ethan to use the holiday time to review any
sections of the course he has found difficult and to keep asking questions to clarify his knowledge
and understanding Wider reading will help broaden his background knowledge. The economics

International Economic Policy: Book Review Essay
International Economic Policy: Book Review
The book reviewed in this essay, International Economic Policy in the
1990s, was to focus on some of the most recent concerns about international trade. Its author,
William R. cline, seems to have some good insights about the topic as it seems that he researched,
taught and lectured about this field of study. The author tried to be as objective as possible and tried
not to be biased by referring to the different opinions about most of the issues he handled. However,
as it is really impossible to be totally unbiased, some biases were to exist due to their necessity to
form an argument. Furthermore, other biases can be detected through his writings by remarking the
aspects of international trade ... Show more content on Helpwriting.net ...
Another notice was that the future of Europe is depending heavily on what will happen to the
"volcano" next to it, which is the former Soviet Union. This as the author thought,
should make Europe assist the former Soviet Union in order to assure that Europe will not be
affected by problems such as economic immigrants (204).
At his conclusion, he was to mention that Europe could play a similar role to the world trade in the
future as the one played by the US after the Second World
War.
He was to look at the Uruguay Round and have some interesting remarks about it. There are two of
them that seemed to me as interesting. The first one states that major achievements in the Uruguay
Round need not to be by further liberalization of trade, but by the very fact that such a round
reassured the already given promise not to return to protectionism (231). As for instance
Japan was fearing "new protective barriers that might be otherwise wise set up against
Japan" if the round was not held (69). The second one was to show how the areas in which the
round was to seek further liberalization were divide into two; categories: the first include services,
intellectual property, and investment, while the second included agriculture and textiles. He
remarked that developed countries agreed to liberalize the second category as to encourage
developing countries to liberalize the first category (68).
Another topic, that he was to view, was the effect on the

Economic Reform Through International Financial Institutions
Over three fourths of African states have pursued programs of economic reform through
international financial institutions such as the IMF and World Bank. These financial institutions are
centred in western states and push western ideas of economic structures, such as liberalization.
Programs of economic reform enacted by these institutions have been viewed as a dominant source
of influence, or power, over African economic policy formulation. These institutions are not only
using the power of knowledge and the worlds acceptance of liberalization, produced by western
schools of thought, these economy reforms also display the interconnectedness of economic,
political and social power. It appears when African countries release one form of power the other
two are relinquished as well. This paper will argue that because of western IR's brand of knowledge,
which promotes liberal economic ideals, especially the belief that free trade benefits all, the west is
able to justify its intervening in foreign economies. Western IR's monopoly over knowledge hold a
powerful position where they posses both the power to define issues impeding upon developing
countries and the position to act as the selfless savior assisting these countries. They are not truly
assisting as much of their actions benefit western countries more than the country receiving help.
This will be seen through examining the case of aid, particularly structural adjustment programs in
Africa. The specific case study that

The Country Of Mexico, Economy, Economic Growth, And...
Abstract
My research paper will briefly describe the country of Mexico by giving an overview of the country,
their history, system of government, and their economic system. I will be reviewing which stage of
the economic business cycle (peak, depression, trough,or recession) the country of Mexico is in and
what the main reasons why they are presently in this stage. I will then elaborate on one of the
possible causes and how it has affects Mexico's GDP (gross national product), pricing structure, job
market, economic growth, and international balances. Lastly, I will give my suggestions about some
possible solutions to how Mexico can correct the challenges that have occurred and are occurring
within their economy. Keywords: Mexico, ... Show more content on Helpwriting.net ...
In this essay, I will be going into how the U.S. economy trade has been helping Mexico get out of
depression and make their way through this period of recovery.
Country's Overview and Brief History
Mexico is almost three times the size of Texas. "Its capital is Mexico City, which is located in the
central southern part of the country" (Encyclopedia of the Nations). Mexico's population is filled
with people of many different heritages, such as Indians, Caucasians, Hispanics, and Africans. Even
though the Mexican population is so diverse their primary language is still Spanish. Mexico used to
have very high death rates, but because of new medications and ways of sanitation slowly being
introduced the death rate has lowered significantly. Some of the main industries in Mexico are
mining, manufacturing, tourism, retail and financial services. Also found on the Encyclopedia of the
Nations website are Mexico's main exports and imports. The country's main exports are
manufactured goods, oil and oil products, silver, cotton, and coffee. Their main imports are
machinery, electrical equipment, car parts for assembly, repair parts for motor vehicles, and aircrafts
and aircraft parts. Mexico's economy depends a great deal on the money sent to them from family
and friends who left Mexico to become migrant workers in the United States. Drug trafficking is
also a big issue in Mexico. It is a business which brings

International Economic Policy in Times of Crisis Essay
Governments face all kinds of crises every day, the approaches may be different but the goal is
always the same–maintain stability. While, wars and crimes against humanity tend to take a toll on
the population, infrastructure and terrain quite literally, financial crises can psychologically cripple a
country. There's something about a financial crisis that conjures a level of panic that could rival the
outbreak of a deadly disease. Maybe this is caused by a lack of visible end, as it seems the light at
the end of the tunnel is only made clear at the end of the crisis. Even with examples from history to
refer to, each financial crisis seems to take on a version all its own like a new strain of a deadly
virus. The government tries to ... Show more content on Helpwriting.net ...
The Austrian School, support free market but believe there are too many variables and the shifts in
equilibrium occur too quickly to rely on models instead use logical deduction based on fundamental
axioms (). Monetarists believe that the emphasis should be on the role of governments in controlling
the money supply (). Keynesian economics and its modern variations remains a common school of
thought in the U.S. that focuses on analyzing macroeconomic elements in the short term using
models (). The protectionist inclined schools, like the American School and at times the Austrian
School, prefer to use import tariffs and/or industry subsidies to calm the economy (). While,
believers in free trade, like the Keynesian School and Monetarists, are partial to adjusting interest
rates and fiscal stimulus in order to restore the economy.
The Great Depression of the 1930s is often used today as a point of reference to learn from failed
protectionist policies. Black Tuesday, October 29, 1929 marks the horrifying beginning to the Great
Depression with the most devastating collapse in the stock market until the recent crisis. The U.S.
government passed the Smoot–Hawley Tariff Act of 1930 in reaction to the financial crisis. The act
raised tariffs on over 20,000 imported goods to the second highest levels in American

International Economics : International Macroeconomics
International macroeconomics is the study of how nations cooperate through trade of goods and
services, through movements of money and by investment based on the idea that resources are less
transportable internationally than goods. During the semester, we learned that a primary motivation
behind a nation's participation in international trade is the belief that resources are not circulated
equally among all trading nations. International trade is the structure where upon American wealth
rests. International trade is the structure upon which American prosperity resides. Free trade policies
have produced a level of competition in today 's open market that stimulates recurrent improvement
leading to superior products, better–paying ... Show more content on Helpwriting.net ...
The purpose of this approach was to achieve a trade surplus while avoiding a trade deficit. By
growing exports and trade utilizing a strategy known as protectionism, rulers were able to
accumulate more gold and affluence for their countries. While mercantilism is one of the earliest
trade theories, it is a method for present–day thinking as many Asian countries and even Germany
still prefer exports and discourage imports through a system of neo–mercantilism in which the
countries encourage a mixture of protectionist strategies and limitations accompanied by domestic–
industry appropriations. It is important to note that approximately every country has at one time,
executed some form of protective rule to safeguard critical commerce in its economy. Although
export–oriented companies characteristically back protectionist procedures that indulge their
industries, trade barriers, hurt others. It is remarkable that a theory introduced back in the sixteenth
century gave way to free enterprise or capitalism giving us insight into the evolution as well as the
importance of the concept of international trade this is as important today to the stability of a nation
as it was back when it was introduced. The one drawback of the mercantilism system was the
oversupply produced that had to result in serious inflation.
In 1776, Adam Smith, frequently referred to as the father of modern economics, strongly differed

Economic Impact On Domestic And International Prices
Since many of us inhabit one area on a day to day basis, the relative price of goods and services
appears fairly stable. Whether that's the cup of coffee you pick up every morning or the paycheck
you receive every two weeks, the value rarely ever changes. However, in reality, currency
fluctuations occur every second and have various economic implications. The textbook case shows
that an exchange rate shocks impacts inflation, interest rates and of course trade, just to name a few.
Beyond directly influencing different economic channels, FX shocks have policy implications
which are not as easily understandable. If exchange rates cause changes in import prices and
domestic inflation, then subsequent monetary policies should be put in place. Following the work of
various economic research, theory has rarely reflected reality when predicting exchange rates
influence on domestic and international prices.
Economic Theory
Flashback to your macro 101 class and you know that exchange rates effects a number of outcomes
in the global economy. Most importantly, exchange rates affect inflation through a number of direct
and indirect channels. If the U.S. dollar appreciates, this directly causes the price of imported goods
to decline. Conversely, a higher exchange rate makes it harder to export goods overseas. Since
commodities are quoted in U.S. dollars, any domestic exchange rate shocks also impact the
commodities market. Like exports, a stronger dollar makes it more expensive for

International Economics And The Field Of International...
I would like to mention some courses that I have taken at Knox College that not only have
encouraged me to take up the particular field of study as a major, but have also fortified me to
volunteer and intern in the field of international development. These courses are: International
Economics (Manisha Pradhananga, Professor), Business & Society (John Spittell, Professor)
Environmental & Natural Resource Economics (Steve Cohn, Professor) and Environmental Ethics
(Bill Young, Professor). These particular courses had a great impact on my decision to pursue a
major in Economics and a double minor in International Relations & Business.
In International Economics, I had written a research paper on low–income nations and their
dependence on primary commodities for exports and its vulnerability to price shocks. I had carried
out my research only keeping applied economics in perspective, therefore, I could not really
understand as to why these low–income countries, although having a wide variety of natural
resources readily available for production and consumption, still struggling to alleviate themselves
from poverty and poor health. The reality and the real–life scenario of such situations was explained
to me in the Environmental Economics class by Professor Steve Cohn. Toward the end of the term, I
was assigned to write another research paper on greenhouse gas abatement options for third world
nations. The ideal solution that came up while working on the project was developed

A Marxist's Standpoint, International Economic Institutions
From a Marxist's standpoint, international economic Institutions have no advantages whatsoever.
Chimni argues that the growing international institutions constitute an imperial global state in the
making (Chimni, 2004). Chimni explains that creating a global state fulfills the interests of a
transnational capitalist class within the international realm at the expense of the social classes in the
developing and underdeveloped countries (Chimni, 2004). Chimni criticizes the institutions' calls
for cooperation and interdependence. He argues that institutions affect the sovereignty of states,
leaving developing countries unable to control their domestic affairs (Chimni, 2004). He mentions
that reforms are essential to face the capitalist dominance of international institutions. He concludes
that with the help of a powerful global social movement, change is possible (Chimni, 2004).
Neoliberals' view of the IMF: Susanne Soederberg argues that the driving force behind globalization
of the economy has been the actions of states, and not necessarily global economic institutions, such
as the International Monetary Funds. Soederberg explains that to overcome systemic crises, states
must restructure the configuration of power, material wealth, and ideational practices, as crises do
not occur because of the globalised market, but rather within and between states (Soederberg, 2010).
Using examples of Mexico and Thailand, Soederberg argues that the global capital cannot be
blamed for

International Economic Exchange And Foreign Investment
Introduction
Whether a country will face a trade–off between the accumulation of wealth and consolidation of
power depends on the type of international economic exchange the country is involved in as well as
the nature of the state. In this essay, I consider trade, currency exchange and foreign investment as
the primary economic exchanges that countries are involved in, as well as the different natures of
states such as developing economies and industrialized nations. I argue that countries involved in
international economic exchange will have to compromise between the accumulation of wealth and
the consolidation of power in the short–term to maximize both in the long term. I also put forward
that the primary objectives of states would be to advance both wealth and power at the same time,
with harmonious objectives. However, because national interests drive international policies, one
will eventually be prioritized over the other. By looking at trade, currency exchange, and foreign
investment I assume that global powers will always favor agreements that benefit their national
interests, or maintain their current position as economic and political powers in the international
arena.
International Trade, Wealth and Power
It is difficult to measure change in a state's relative power but it is often indicated by its economy's
size, its influence on other states' economies, the range of their military power and the degree of
political influence in the international system. We

Evaluate the Role of International Trade and Economic...
Evaluate the role of International trade and economic integration in promoting development.
Traditionally, development has been measured in terms of income levels (GDP per capita) as this
can show the value of a country's goods and services produced in a year shared between its
population. The GDP per capita can then be compared between multiple countries to form
comparisons. However, the fundamental flaw of GDP is that it does not show what resources were
used, how they were used, pollution or the sustainability of resource exploitation. Bob Kennedy
famously said before his assassination "Our gross national product counts air pollution and cigarette
advertising, and ambulances to clear our highways of carnage...yet the gross national ... Show more
Due to the fact that focuses on only three aspects of development, it does not give a complete
picture of the level of development. More aspects of development could increase the value of the
HDI as a measure of development, however it could be argued that adding more and more indicators
reduces the value of a composite indicator of development As each subsequent indicator becomes
less significant in its overall measure. Moreover, the HDI brings equal weighting to those three
indicators. There is no economic or social justification supports the three indicators being given
equal weight. Overall however it must not be taken too literally or in isolation from other indicators
of human well–being. Other indexes Also in development and include 'The Happy Planet Index'
which places significant importance on resource sustainability and environmental degradation
management, as well as the overall welfare of the general population. For example the feeling of
"stress" of the population this felt to be very important and works out the average working week and
average leisure time per capita. This is perhaps a very important measure is in terms of productivity
and workforce which has a high GDP but much leisure time could be said to have greater productive
efficiency. International trade is one of the ways in which countries globally can increase their
populations welfare and lead ultimately to increased development. Trade is defined as the

Economic Factors Of International Trade
1. Introduction
There are 2 purposes in this report. The first one is to determine whether developing nations are
suffered from competitive disadvantages in the global market, and to find out whether the less
developed countries taking any benefits from the free trade policy.
There are plenty of reasons for firms to desire to go international and expand their business to
foreign markets. They see the opportunities to increase the market shares and the market size as well
as to increase the profits by gaining greater revenues while at the same time reducing the production
costs by utilising all the cheap resources they can obtain than only stick in the domestic markets.
However, there are also facts which make firms hard to go: political factors and economic factors.
Economists believe that international trade is a tool that can ends poverty and at the same time still
providing benefit of production cost reduction to the developed nations and come out a win–win
situation that both the developed and less developed nations can be benefited from it. Nonetheless,
there are lots of researches find out the reality goes different from the way the economists expected.
The theories, research findings and real life examples are derived from secondary resources through
the literature reviews of textbooks and academic journals.
The body of this essay will start with analysing the factors affecting the effectiveness of developing
countries when they conducting international trade.

The Deployment Of Economic Sanctions On The International...
The deployment of economic sanctions on the international stage by states to influence the behavior
of other states has become the norm in International Relations. Despite the increase in popularity of
this practice over the course of the past century, the question of its efficiency is one that is still
debated and remains unanswered. The idea that putting economic pressures on a country to illicit a
certain behavior or change in behavior from that country works in theory, but in practice, it is more
complicated and does not necessarily work the way that theory suggests it should. Some economists
and policy analysts have taken the approach of deconstructing the subject in order to consider what
variable may or may not affect the efficiency ... Show more content on Helpwriting.net ...
Positive sanctions are meant to foster relations between countries. Negative sanctions are intended
to cause another country economic harm. The debate around economic sanctions typically focuses
on the negative kind. Sanctions can be unilateral – from one sender country to one target country –
or multilateral from multiple countries. Multilateral sanctions can be orchestrated by one main
country supported by other countries, or they can be sent under the auspices of an international
organization. Raul Caruso distinguishes three different kinds of negative sanctions – boycotts,
embargoes, and
Kassim 3 financial sanctions. A boycott is the restriction of imports from the target country;
embargoes are restrictions on exports to the target country; financial sanctions are restrictions on
investment in the target country (Caruso "Should We Set" 23). Kaempfer and Lowenberg posit that
economic sanctions can be proposed for the following three reasons: in response to a nation that
threatens the wealth or security of the sender nation; to achieve moral or ideological goals; as a part
of trade policy and commercial relations – i.e. in response to tariffs or quotas (Kaempfer 2). The
question of whether or not sanctions are efficient is a difficult one to answer. A major contributing
factor to this difficulty is the lack of a universal standard for gauging success. Analysts create the
criteria by which to judge success, and these criteria are not accepted by

How Global Economic Environment Is Affecting International...
How Global Economic Environment is affecting International Marketers? ––––––––By Md. Jafar
Sadique, MBA, Southeast University Bangladesh
1. Introduction:
International business is taking different shades and is unavoidable today. This dynamic world is
rapidly changing to the extent that is has been reduced to a "Global village".
The truth is, we are going through the most severe global financial crisis since the days of Great
Depression. Originated in USA, economic recession is affecting all the major players of world
economy. Governments and major policy makers of world economy have taken notice of the
urgency of the situation and ... Show more content on Helpwriting.net ...
Over the years, many banks in the US started the practice of offering home loans to high risk
individuals, i.e., individuals who had a high probability of defaulting on their loans. The banks
justified this move by saying that even if these individuals defaulted on their loans, the amount
could be recovered by selling off the property in question.
Over a period of time, many of these individuals defaulted on their payments, as was expected, and
the banks put the properties back on the market. However, when so many properties were put on
sale at the same time, the property prices, which were already over inflated to begin with,
plummeted. The unprecedented drop in property rates proved fatal for banks that had already
invested most of their money in these speculative deals, and they were forced to close down.
The collapse of these banks is just one of the indicative causes of the present recession. The roots of
this recession can be said to lie in over–inflated property prices, oil prices, and commodity prices.
Artificially inflated prices are typical of a profitable market. When the market is doing well, the
sellers eventually become greedy and raise the prices. All is well, as long as the buyers continue to
be able to afford the inflated prices. However, the day the prices reach a level where the majority of
the buyers cannot afford them, a crash in the prices, and consequently a recession, is inevitable.
3. Present Global Economic Environment:
The year 2008

Economic Theories Of International Free Trade Essay
Throughout the centuries of economic theories, there have always been major disagreements
amongst economists. Each believing their theory provides a better explanation or solution to the
economic situations the globe finds itself in. The anomaly to these disagreements is the theory, first
introduced by Adam Smith, which states that international free trade is in the best interest of the
trading countries and the ever globalizing world as a whole. This essay shall compare the views of
the great economists; namely Adam Smith and David Ricardo, on their economic theories of
international free trade.
Over the years of economic development and globalisation, trade has taken place between people
and countries. Dating back to the beginning of AD, trade occurred between the Roman Empire,
Parthian Empire and the Han Dynasty. During the days of colonisation, the colonised countries
would export the raw materials to the colonising countries and import the finished manufactured
goods from them. In the modern day, globalised world we live in, international trade occurs between
countries companies, peoples and governments by the second (Elena, 2015). There are often
restrictions on trade between countries, such as import taxes, to try incentives the population to buy
domestically produced goods.
Adam Smith, who is considered a pioneer of the great economists, was a Scottish born moral
Philosopher, political economist and thought of as a key figure in the Scottish enlightenment. He
was

International Foundation Course : Economics Option
International Foundation Course: Economics Option
Essay Writing
"In what ways has the economy of my country been affected by globalization?"
Globalization is a worldwide trending phenomenon for the past century that has affected millions of
lives in many different ways. Cambridge English dictionary defines globalization as "the increase of
trade around the world, especially by large companies producing and trading goods in many
different countries" . Globalization has many facets and may have implications economically,
socially, politically, technologically and culturally; it affects each country and individual uniquely.
In essence, globalization is the integration of national economies: openness to trade, financial flows,
foreign direct ... Show more content on Helpwriting.net ...
With limited number of resources during the early years, thousands of refugees and a perpetual state
of threat of attack from India, Pakistan could do little to revive the economy of the state. Pakistan
essentially became an agricultural economy; the share of agriculture sector to GDP was 53 percent.
Pakistan adopted import substitution industrialization (ISI) policy, as was the norm with developing
countries in the 1950s and 1960s, through over–valued exchange rate by using both tariff and
nontariff barriers on foreign transaction and use of quantitative restrictions on agricultural products
export. Moreover, Pakistan suffered from extreme inequality and rise in poverty rates; the wealth
was concentrated among only 22 families of Pakistan. Economic management remained in the tight
clutches of the government, with bare minimum integration internationally.
Pakistan started liberalizing its economy under third military general, Zia ul Haq's regime in late
1970s. Free market policies were adopted and economic liberation paved the way to Pakistan
becoming part of the global economy. The process of liberalization started with import
liberalization, at that time one hundred products were on the negative list and about 50 products
were in the restricted list; quantitative restrictions were removed from all the products. Public and
private sector were given their due importance and a

International Enterprise With Economic Development And...
In modern world a lot of companies will start their business in other countries, to become an
international enterprise with economic development and global popularity (TAST, 2014).
International companies to carry out their business around the world, multinational corporations are
an important driving force of internationalization and globalization, so that business will not be
limited to one country, and increase the company 's sales, also conducive to global companies
seeking cheaper labour on a global scale, they can find cheaper recourse, reducing the company 's
production cost (TAST, 2014). At this time, the location decision is particularly important when the
company open a new company in the overseas, the company has a lot of issues ... Show more
Some authors take the opposite view that the company 's parent country tax policy will also affect
the company 's overseas location, through studying data between 1999and 2003 multinational firms
in 33 European countries (Barrios, Huizinga, Laeven, &Nicodème, 2012).According to Robinson
and Stocken (2013) some countries in order to attract foreign investment will be made very
favourable tax policy, some enterprises consider the interests they will likely choice this country.
Choen (2000) also think tax policy has a major impact on business location decisions, some of the
tax return or tax cuts for the enterprises profits have a great impact, but the government will be
worried too preferential policies for local enterprise is unfair, maybe lead the people criticism. For
example, China 's foreign investment policy, the government will reward some foreign firms which
have a good develop, or let some multinational companies enjoy low tax rates tax policies that
encourage multinational companies to enter the Chinese market, but also to promote the Chinese
enterprises seek out

Pearson International 8th Edition.International Economics,...
EC 239 Introduction to International Trade Instructor: Sharif F. Khan Department of Economics
Wilfrid Laurier University Winter 2010 Suggested Solutions to Assignment 2 (Optional) Part B
Short Questions B1. Question # 1 of Ch 2 (8th ed. of the textbook) Canada and Australia are
(mainly) English–speaking countries with populations that are not too different in size (Canada's is
60 percent larger). But Canadian trade is twice as large, relative to GDP, as Australia's. Why should
this be the case? We saw that not only is GDP important in explaining how much two countries
trade, but also, distance is crucial. Given its remoteness, Australia faces relatively high costs of
transporting imports and exports, thereby reducing the attractiveness ... Show more content on
Helpwriting.net ...
While this demonstrates that the United States has an absolute advantage in services, this is neither a
necessary nor a sufficient condition for determining comparative advantage. For this determination,
the industry ratios are also required. The competitive advantage of any industry depends on both the
relative productivities of the industries and the relative wages across industries. Page 2 of 11 Pages
B5. Question # 8 of Ch 3 (8th ed. of the textbook) Anyone who has visited Japan know it is an
incredibly expensive place; although Japanese workers earn about the same as their U.S.
counterparts, the purchasing power of their incomes is about one–third less. Extend your discussion
from question 7 (of Chapter 3) to explain this observation. (Hint: Think about wages and the
implied prices of nontraded goods.) While Japanese workers may earn the equivalent wages of U.S.
workers, the purchasing power of their income is one–third less. This implies that although w = w*
(more or less), p < p* (since 3p = p*). Since the United States is considerably more productive in
services, service prices are relatively low. This benefits and enhances U.S. purchasing power.
However, many of these services cannot be transported and hence, are not traded. This implies that
the Japanese may not benefit from the lower U.S. services costs, and do not face an international
price which is lower than their domestic price. Likewise, the price of

International Trade : Economic Activity Of Nations
International trade is important to the overall economic activity of nations, including the growth and
domestics' production. According to the United Nations Conference on Trade and Development
(UNCTAD) and WTO, international trade has grown remarkably in recent decades as shown in
figure 1 and 2. It can be seen that the growth of trade has led into the rapid economic growth in
some countries. The reasons of rapid growth in world trade is due to the reduction of trade barriers
at global and regional level. The country also can gain from trade for some reasons. Firstly, trading
leads the country to produce and consume at prices which differ from those international market
does, so if the price in international market is more expensive, ... Show more content on
Helpwriting.net ...
He argued that trade can be beneficial because each country has a differentiation about the cost of
producing different goods. Smith determined that the dissimilarities of the cost of producing caused
by the differences in efficiencies of labor in each country. Smith emphasized that the theory of labor
efficiencies lead into the absolute advantage of producing some goods. He argued that each country
will have gain if only they exchange its products which have an absolute advantage comparing with
other countries. However, his theory seems not very deep (Södersten and Reed, 1994). Then,
Ricardo was the person who completed Smith's theory by proposing the theory of comparative
advantage. Ricardo argues that Smith's theory is not suitable for a country which is more productive
than other countries in all lines. Ricardo define that all countries have same opportunities to pursue
a benefit from trade as long as the country is not equally less productive in all lines (Södersten and
Reed, 1994). In Ricardo's model, a country has a comparative advantage in producing a good if the
opportunity cost of producing the good is lower at home than in host country, but to know the
country has a comparative advantage in one good, there must be at least two countries and two
goods (Södersten and Reed, 1994). But, there are some criticisms on the theory of comparative
advantage. Firstly, this

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