Modern Trade Patterns in the 21st Century
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Questions and Answers

What is the role of technological progress and knowledge creation in the context of the New Trade Theory?

Driving competitiveness in global markets.

How does the New Trade Theory align with observed patterns of trade?

By recognizing the prevalence of intra-industry trade and the importance of product differentiation.

How does the theory of New Trade foster diversification?

By facilitating diversification of products and markets, reducing countries' dependence on a few industries or trading partners.

What are the challenges related to data and measurement in the New Trade Theory?

<p>Quantifying economies of scale and their impact on trade presents methodological challenges, limiting empirical validation.</p> Signup and view all the answers

Why is the New Trade Theory considered less accessible for practical application in some contexts?

<p>It requires sophisticated modeling techniques to capture the intricacies of imperfect competition and firm behavior.</p> Signup and view all the answers

How does the New Trade Theory pose challenges to traditional trade policies?

<p>By potentially complicating the formulation of trade policy interventions that focus solely on comparative advantage.</p> Signup and view all the answers

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