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balance of paymentsperhaps the most immediate reason for bringing in protection is a balance of payment deficit if a country had a persistent
dumpingif goods are sold on a foreign market below their cost of production this is referred to as dumping this may be undertaken either by a
structural unemploymentthe decline of the highly localized industry due to international trade causes great problems of regional structural
infant industry argumentadvocates of this maintain that if an industry is just developing with a good chance of success once it is established and
cheap labour it is often argued that the economy must be protected from imports which are produced with cheap or sweated labour some people
gains from international tradethe gains from international trade are to make the participating countries better of than they would have otherwise
theory of comparative advantagein his theory put forward in a book published in 1817 david ricardo argued that what was needed for two countries to
international tradedefinitionit is the exchange of goods and services between one country and another international trade can be in goods termed
measures to control inflationan inflationary situation can effectively be addressedtackled if the cause is first and foremost identified
the impact of inflationinflation has different effects on different economic activities on both micro and macro levels some of these problems are
demand-pull inflation is when aggregate demand exceeds the value of output measured in constant prices at full employment the excess demand of
causes of inflation at present three main explanations are put forward cost-push demand-pull and monetarycost-push inflation occurs when he
measurement of inflationthe rate of inflation is measured using the retail price index a retail price index aims to measure the change in the
meaningthe word inflation has at least four meanings a persistent rise in the general level of prices or alternatively a persistent falls in the
liquidity and the multiple contraction of depositsmany of the instruments of monetary policy depend upon limiting liquidity which has a multiple
interest rates decreasing the rate of interest may not encourage investment but increasing the interest rate tends to lock up liquidity in the
monetary policy the problems concerning the ability of monetary policy to influence the economy as for instance the doubts about the ability of lower
problems of prices and incomes policyi confrontationthe imposition of the prices and incomes policy voluntary or statutory risks the possibility of
the neo-classical viewthe neo-classical view is that market forces are the best directors of the economy positive attempts by the government it
difficulties in using fiscal policythere are several problems involved in implementing fiscal policy they includetheoretical problemsmonetarists
policy conflictsin their attempts to achieve the policy objectives governments often face what are called conflict of objectives these arise
direct intervention the government can also intervene directly in the economy to see that its wishes are carried out this can be achieved
monetary policiesthis is the direction of the economy through the variables of money supply and the price of money expanding the supply of money
public sector borrowing requirement psbrpublic sector borrowing requirement psbr is the amount which the government needs to borrow in any one year
burden of the national debtthe extent of the burden on a nation of public debt depends in the first place on whether it is an external or an internal