Balance of international indebtedness
Problem: Concerning the balance of international indebtedness, when is a country a net creditor or a net debtor?
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Analyze the following statement: "Given an open economy with high capital mobility, fiscal policy is strengthened under fixed exchange rates."
What happens to the balance-of-payments under a fixed exchange-rate system when expansionary or contradictory monetary policy is used?
Problem: Explain the difference between expenditure-switching policies and expenditure-changing policies.
Respond to the following statement: "Anti-dumping laws are good for a nation".
Problem: What are the effects of transportation costs on trade? What would happen if transportation costs were absent?
Question 1: Define tariff and the different types of tariffs. Question 2: Identify and discuss the major nontariff barriers to trade.
The factor-endowment theory suggests you should trade in the products that you can make from the production factors and resources you naturally possess.
Problem: Illustrate the principles of absolute and comparative advantage by using two nations in a hypothetical investment scenario.
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