In terms of factor endowments, India is somewhat similar to other developing countries trading with the...

In terms of factor endowments, India is somewhat similar to other developing countries trading with the U.S.: they all are labor abundant and capital scarce. Now that India is also opening up to world trade, how would you expect this to affect the welfare of the U.S.? Illustrate your answer in a relative-demand-relative-supply diagram.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Consider the following information on factor endowments for the two countries of Spain and Germany. Factor...

Consider the following information on factor endowments for the two countries of Spain and Germany. Factor Endowmetns USA China Labor Force 30 million 15 million Capital Stock 200,000 machines 400,000 machines 1) If these two countries agrees to trade, what kind of restructuring would the countries face? 2) Would there be complete specialization in each country? 3) Would capital and labor remain fully employed in both the countries with persisting trade? Why or why not? 4) How would income distribution for...

Use the Rybczynski theorem to prove that the more dissimilar countries become in their factor endowments,...

Use the Rybczynski theorem to prove that the more dissimilar countries become in their factor endowments, the more likely it is to obtain complete specialization once trade begins

Compare the performance of India with other South Asian countries in terms of socio-economic development in...

Compare the performance of India with other South Asian countries in terms of socio-economic development in the recent decade. Answer in more than 400 words.

“When differences between countries’ factor endowments are significant the inter-industry trade will dominate trade flows, but...

“When differences between countries’ factor endowments are significant the inter-industry trade will dominate trade flows, but when these differences are small or non-existent the intra-industry trade will tend to dominate trade flows.” Do you agree or disagree? Evaluate fully. Make sure you outline the key theory (ies) of intra-industry trade in answering this question.

Discuss the nature of unemployment in developing countries like India. How can the problem of unemployment...

Discuss the nature of unemployment in developing countries like India. How can the problem of unemployment in developing countries be solved?

In an open economy, there is interaction with other economies in terms of both trading of...

In an open economy, there is interaction with other economies in terms of both trading of goods and services and borrowing and lending. Select one: True False

Discuss some of the differences between developing countries and industrial market countries, including differences other than...

Discuss some of the differences between developing countries and industrial market countries, including differences other than per capita income. Give examples.

Suppose a country was freely trading electronics with other countries and now it has decided to...

Suppose a country was freely trading electronics with other countries and now it has decided to impose a tariff on imported electronics. Draw a graph to illustrate the change in consumer surplus, the change in producer surplus, the deadweight loss, and the government revenue.

How important is foreign aid for developing countries in relation to their other sources of foreign...

How important is foreign aid for developing countries in relation to their other sources of foreign exchange receipts? What are the potential costs and risk to the recipients and how could they be reduced?

Should the United States develop a national healthcare plan similar to other developed countries?

Subjects