Assignment BX3021 - Assignment BX3021 Question 1: Synopsis...

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Assignment BX3021 Question 1: Synopsis of Trade Theories Mercantilist theory: A political and economic policy seeking to advance a state above others by accumulating large quantities of precious metals and by exporting in large quantity while importing in small. Absoloute advatage: The name for the ability of one entity to engage in more efficient production than another entity. Assuming equal inputs, the entity with an absolute advantage will have a greater output. Comparitive advatage: the ability of one business entity to engage in production at a lower opportunity cost than another entity. Comparative advantage, rather than absolute advantage, is useful in determining what should be produced and what should be acquired though trade. Heckscher-Ohlin theory: differences in relative factor endowments among nations underlie the basis for trade Product Life-Cycle Theory: This theory states how a country's export can later become its import through different stages in the product life cycle; New Product stage, Maturing Product stage and Standardized Product stage New Trade theory: is the economic critique of international free trade from the perspective
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Assignment BX3021 - Assignment BX3021 Question 1: Synopsis...

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