ECON 420 Final1 - UNIVERSITY OF ILLINOIS L>epartmencfw_...

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UNIVERSITY OF ILLINOIS L>epartmen{ of'Bconomics Economics 4201 523 Internatkmal Economics Professor W. RaeI' AfiswerALLquestions. ~e.fifi.nfi~ean .•"••• '.' ..•••. ..... mr. C ..omnt .•• ·.· .. ·.•.e. n.t .•.b .. m.e. fl.y.o. .••. n..,; /.~ .•.•. ................... ,.......................... .. e) •• ;~tradedi"Ver$ion . ....:t~~~' ... ~swma~!Tiwtm~s~ ~. impa¢tof"intpo~T:st~etiol1Sortf'a:¢torprices ~most41lVor~"nationprinciple .• ~tradebetWeen2 countries with. identical produ¢tionpossioiHtycurvesv$, tradebernreen 2 countries with dUferelltproductionpossibiHtycl,Jf\lcS ~. dumping With the USE OF DIAGRAMS, and with subsequentexplanati<lns,.snow the following: (20 points) ~thecase where theb~rdenof the tariff is borne mainly by.tlle· cort.SU11l¢rs.o the importing country; ..... ' ·"~q~°tasvs.uuiffs ,•. ...•. ...................... ,. . . ,•. . < .,'.',•. ... ~theimpaetof'atariffonproducers,consumers,and thegtfVernt'tlent; ~bri:t1y discuss different arguments for tariffs and cotnnlentontheirvalidit: (:here diagrams are not .necessaty) . . Howlllightintetnation~,tradehavehurt· Third ·WorldC<)1.1"'try~$·ifi:dlepas1 flow did ISl (Import SuostitutionIndustriaUzation)affecf'Ehirc.lW'Qdc.l countries' trade relations? Are the theonesofcomparative· advantage and the Pret>ischtheory , corttra:dictoryto each other? Explain. (29l?ointsl ~What are the ·maJofdifierencesb:tween foreign ••directinV~$bneQts::ifith late. 19 th and early 20 th century and ··such investment~inthe>sepnndh{dfof the 20 th century and the beginning of the 21 lt century? .~ . ~..•. . ··· •..•. ·.• I·~.~S.cu.sssome of the .positive and Some of the. ~egative.·. .as. ... p. ;ectSof' mdttmatlOnals.(2UpotntS) ..~
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nt. .,and/or C"OlDlfient briefly on: . a) Offer Curve (also known as the reciprucal demand curve): Th is the oom@Nla~n. .e~l~~~~~&i~1;jt:t\Wl~¥t}S . . international exchange rate) curves '. ' S\;it; d) Transfer pricing: making sure pI!0fi~eat~~l' @li1@%i~a'X,~s~$\pQli'tt~ns.e'tt~ Also known as profit remittances. Sometimes~.~_,o.M_h~_ s ' A large share of world trade consists of transfer of goods, intangibles and services within multinational enterprises. To detemrine~, in eMhjurisdiction, the right price (ann's length price). e)iil1Pacldfilfiporlrestt'icfiullS ()ll ~~~laJ entrepr~l1eUfship) . . pricesinothet~atJmets, factor.li1jzjc00a(!Jj~$t~amN~fi~¥€1e&'&~~0ma;A~~,J.y ..·Goods . internlftlonally,butGnly some factors ofproc1uction can oetraded. pi'o'ffU~m~t~wi\1}'te~(likethroughwages .•and intellestrates-.··to·eo
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capltalI11oveI11ents)·.·tkiM.tfle'l;"fe8fPiet8"'eU'f'1"~~'1"ttem~"'wn~··.QrivettpthM,ri~~ O,Qmestically. . . .. . .. .... . . . Accordingt()~~~u~i.zati.on
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ECON 420 Final1 - UNIVERSITY OF ILLINOIS L&gt;epartmencfw_...

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