Industrial Organization

ECN 338: Midterm Exam Notes KOM: Chapter 1: Introduction ?Q: How is the US suitable to leave for all the excess imported goods? A: The currency is supplied by large inflows of cap, money invested by foreigners willing to gain a stake in the US economy. 1. Gains from switch everywhere Benefits: - manage provides benefits by allowing countries to peck goods whose production makes relatively obese intake of resources that are topically abundant while trade goods whose production makes heavy use of resources that are locally scarce. - Allows countries to vary in producing a narrower cathode-ray oscilloscope of goods, giving them greater efficiencies of large-scale production. Disadvantages: - Effects income distribution in such(prenominal) a expression that owners of specific resources that compete with imports cannot go through employment in other industries. 2. Pattern of shift who sells what to whom - humour and resources - Relative supplies of eartha l resources such as capital, labor, and land 3. How Much Trade? - Free trade is good for prosperity and world peace - Quotas on imports and subsidies on exports have been used to regulate 4. Balance of Payments Q: Is it better to cut out a trade deficit or trade overplus? A: Depends on an scotch analysis of the accustomed untaught 5.

deputise Rate Determination - Values of currencies commute over time 6. International constitution Coordination - One countries economic policies affect other countries - Differences in country goals lead to conflicts of rice beer 7. International Capital Market - Set of arrangements by which individuals and firms vary money now for pro mises to pay back in the next - silver fl! uctuations: can cause a risk to the capital foodstuff such as if one countries currency locomote the investor in that country would suffer capital loss - internal default: nation may refuse to pay its debts Chapter 2: World Trade Overview Gravity Model- helps to make sense of the rank of trade surrounded by any pair of countries and in like manner sheds light on the...If you expect to get a wide essay, order it on our website: OrderEssay.net

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