1. no entrepreneur embarks on any business venture without finance. As an international business student, disclose...

1. no entrepreneur embarks on any business venture without finance. As an international business student, disclose all relevant sources of finance

2 in order of emergence, discuss 4 (four) trade theories giving strong reasons in support of the order

3. Distinguish between static and dynamic gains from trade

Solutions

Expert Solution

Various sources of finance includes stake sale, non convertible debentures, asset sale, commercial paper, letter of credit, venture capital and private equity investment.

Theory of Mercantilism states that nations wealth is linked to balance of export minus imports
Theory of comparative advantage states that nation gains when it exports products with highest comparative advantage
Theory of absolute advantage states that nation must produce and export goods in which production is efficient and has lowest cost
New trade theory assumes that nations must focus on increasing return to scale and network effect.

All these form important assets in International trade as they help nations in saving import bill, manage currency depreciation and strengthen bilateral relations.

Static gains generally arise from optimum allocation of factors of production wherein nation shall have comparative advantage and edge over others.

While dynamic gains arise from absolute advantage and accumulate over period of time.

Rahul Sunny answered 11 months ago

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