Podcast
Questions and Answers
According to the absolute advantage theory, which country should produce and distribute a good?
According to the absolute advantage theory, which country should produce and distribute a good?
- The country that has absolute advantage in producing the good (correct)
- The country that has the largest population
- The country that has the most advanced technology
- The country that has the highest GDP
What does the HO Model suggest about a country's specialization in production and export?
What does the HO Model suggest about a country's specialization in production and export?
- It should specialize in the production and export of the goods with the lowest production cost
- It should specialize in the production and export of the goods with the highest demand
- It should specialize in the production and export of the good that uses intensively the factor of production it has in abundance (correct)
- It should specialize in the production and export of the most expensive goods
What does the term 'competitive advantage' refer to in international trade?
What does the term 'competitive advantage' refer to in international trade?
- Higher production cost than other countries
- Higher opportunity cost to produce a certain good than other countries
- Lower opportunity cost to produce a certain good than other countries (correct)
- Equal opportunity cost to produce a certain good as other countries
What does the Revealed Comparative Advantage (RCA) index measure?
What does the Revealed Comparative Advantage (RCA) index measure?
What does the Gini coefficient measure?
What does the Gini coefficient measure?
What does the term 'intergenerational elasticity' refer to?
What does the term 'intergenerational elasticity' refer to?
What is the 'Commitment to reducing inequality Index 2018'?
What is the 'Commitment to reducing inequality Index 2018'?
What does the term 'replacement fertility' refer to?
What does the term 'replacement fertility' refer to?
What does the Lorenz curve illustrate?
What does the Lorenz curve illustrate?
What is meant by 'market income'?
What is meant by 'market income'?
What is the 'technological divide'?
What is the 'technological divide'?
What does 'urbanization' refer to?
What does 'urbanization' refer to?
What is 'dependency ratio'?
What is 'dependency ratio'?
What does the term 'categorical inequalities' refer to?
What does the term 'categorical inequalities' refer to?
What is 'slowbalization'?
What is 'slowbalization'?
What is a 'financial crisis'?
What is a 'financial crisis'?
What do economies of scale refer to?
What do economies of scale refer to?
What does the Gravity Model state about trade?
What does the Gravity Model state about trade?
What does inter-industrial trade involve?
What does inter-industrial trade involve?
When does Intra-Industrial Trade occur?
When does Intra-Industrial Trade occur?
What does the Grubel-Lloyd Index measure?
What does the Grubel-Lloyd Index measure?
What is Protectionism?
What is Protectionism?
What is Free Trade?
What is Free Trade?
How do Import Quotas restrict trade?
How do Import Quotas restrict trade?
What are Voluntary Export Restraints (VERs)?
What are Voluntary Export Restraints (VERs)?
What are Domestic Content Requirements?
What are Domestic Content Requirements?
What is the role of the World Trade Organization (WTO)?
What is the role of the World Trade Organization (WTO)?
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Study Notes
International Trade and Economic Development
- Economies of scale refer to cost advantages due to operational scale, measured by the amount produced per unit of time.
- The Gravity Model states that closer countries with higher GDP will trade more.
- Inter-industrial trade involves countries specializing in producing and exporting certain goods and importing others.
- Intra-Industrial Trade occurs when a country both produces and exports the same goods it imports.
- The Grubel-Lloyd Index measures intra-industrial trade of a specific product using a formula with a numerator and denominator.
- Protectionism is the theory or practice of shielding domestic industries from foreign competition by taxing imports.
- Free trade is international trade without tariffs, quotas, or restrictions.
- Import Quotas restrict the quantity of a good that may be imported and are enforced through licenses.
- Voluntary Export Restraints are limits imposed by the exporting country to protect consumers by limiting exports to a specific country.
- Domestic content requirements are regulations that specify a fraction of a final good to be produced domestically.
- The World Trade Organization promotes free trade, reduces trade barriers, and provides stability and fair competition.
- Economic development encompasses multidimensional processes for improving living standards and goes beyond GDP growth.
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