Question

Question for Discussion ---------- 2. Examine the role demand-side factors play in shaping the pattern of world trade. 3. Why do demand-side factors sometimes lead to the geographical concentration of manufacturing industries in particular countries or regions?

Answer 1

2. Trade reflects the interplay between the proportions in which the factors of production are available in different countries and the proportions in which they are need for producing particular goods. If the growth is sufficiently baised towards producing more of a good that was initially imported,the country could reveals its pattern of trade by becoming an exporter of the baised growth good and importer of the other goods.

Demand side policies focuses on changing aggregate demand to achieve the goals of price stability,full employment and economic growth. The goal is to bring the Aggregate demand to the full employment level of real GDP. Demand side factors are influences on the level of economic activity and spending.Changes in these factors can cause demand and hence inflation,to become stronger or weaker.

3.Aggregare Demand side policies ,including budgetary and monitary policies are governmet measures designed to slow or accelerate the levels of spending or aggregate demand and economic activity. They are often applied in a country cyclical way to improve economic stability.

Economic Globalization includes more than simply increased international trade. Set of processes through which economic activity are increasingly interconnected. This act as frst factor for the emergence of new set of actors on global level.The aggregate measure of production equal to the sum of gross values added of all resident institutional units engaged in production.

Even in the absence of supply side constrains , even if the new technologies were freely accessible to the developing countries, demand side factors are only capable of preventing any generally rapid and widespread diffussion of these technologies in the world.