5. International trade and development Identify whether each scenario in the following table is an example or foreign aid, import substitution, or export promotion. Scenario In January 2007, the Pakistani government provided research and development support and loans to local textile companies that sold their products abroad. In 1989, Japan announced a three-year, $600 million grant program to help alleviate poverty in Africa. After World War II, the Argentine government actively supported domestic production of textiles, leather, and home appliances in an effort to become more self-sufficient and less reliant on foreign goods. Which of the following are common criticisms of foreign aid? Check all that apply. Other countries could retaliate by instituting trade restrictions. It harms the agricultural sectors of poorer countries. Corrupt governments misuse aid funds. Foreign Aid Development Strategy Import Export Substitution Promotion O O

5. International trade and development Identify whether each scenario in the following table is an example or foreign aid, import substitution, or export promotion. Scenario In January 2007, the Pakistani government provided research and development support and loans to local textile companies that sold their products abroad. In 1989, Japan announced a three-year, $600 million grant program to help alleviate poverty in Africa. After World War II, the Argentine government actively supported domestic production of textiles, leather, and home appliances in an effort to become more self-sufficient and less reliant on foreign goods. Which of the following are common criticisms of foreign aid? Check all that apply. Other countries could retaliate by instituting trade restrictions. It harms the agricultural sectors of poorer countries. Corrupt governments misuse aid funds. Foreign Aid Development Strategy Import Export Substitution Promotion O O

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 35P: If trade increases world GDP by 1 per year, what is the global impact of this increase over 10...

See similar textbooks

Similar questions

Can a nations comparative advantage change over time? What factors would make it change?
How does comparative advantage lead to gains from trade?
Are differences in geography behind the differences in absolute advantages?
Under what conditions does comparative advantage lead to gains from trade?
In France it takes one worker to produce one sweater, and one worker to produce one bottle of wine. In Tunisia it takes two workers to produce one sweater, and three workers to produce one bottle of wine. Who has the absolute advantage in production of sweaters? Who has the absolute advantage in the production of wine? How can you tell?
Review the numbers for Canada and Venezuela from Table 33.12 which describes how many barrels of oil and tons of lumber the workers can produce. Use these numbers to answer the rest of this question. Draw a production possibilities frontier for each country. Assume there are 100 workers in each country. Canadians and Venezuelans desire both oil and lumber. Canadians want at least 2,000 tons of lumber. Mark a point on their production possibilities where they can get at least 3,000 tons. Assume that the Canadians specialize completely because they figured out they have a comparative advantage in lumber. They are willing to give up 1,000 tons of lumber. How much oil should they ask for in return for this lumber to be as well off as they were with no trade? How much should they ask for if they want to gain from trading with Venezuela? Note: We can think of this ask as the relative price or trade price of lumber. Is the Canadian ask you identified in (b) also beneficial for Venezuelans? Use the production possibilities frontier graph for Venezuela to show that Venezuelans can gain from trade.
Trade has income distribution effects. For example, suppose that because of a government-negotiated reduction in trade barriers, trade between Germany and the Czech Republic increases. Germany sells house paint to the Czech Republic. The Czech Republic sells alarm clocks to Germany. Would you expect this pattern of trade to increase or decrease jobs and wages in the paint industry in Germany? The alarm clock industry in Germany? The paint industry in Czech Republic? The alarm clock industry in Czech Republic? What has to happen for there to be no increase in total unemployment in both countries?
1. Suppose there are two countries Peru and Japan that produce Food and Fuel. Peru can produce 7,523 units of Food or 17,853 units of Fuel using a labour force of 8000. Japan can produce 5,733 units of Food or 24,156 units of Fuel using a labour force of 5000. a) Which country has the comparative advantage in food? In fuel? Explain. b) Which good(s) should each country specialize in? c) Discuss the benefits of specialization for each country.