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Unformatted text preview: 2. Rising Real Incomes – this would result in a decline of international trade a. Engel’s Law – as incomes rise, people started to spend less on food and basic necessitates. Later in life a corollary was added: as incomes continue to rise the population started spending more of their income on services-Demand for food and manufactured goods started to decline relatively quickly 3. Economic Instability was increasing – greater public demand for protectionism a. This remark was incorrect because there was stability for a few years after the war b. There has actually been a decrease in protectionism within most countries; mainly in the areas of agriculture and textiles -Since WW2 the most rapid growth in trade has been between industrialized countries-Industrialized countries are now trading manufacturing goods for manufacturing goods (ie. car parts between Canada and USA)...
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- Winter '08
- International Trade, manufacturing goods, Primary producing countries