Tentafrågor 2 Flashcards
What theorem is included in this model?
Factor price equalization (FPE-theorem) says that the prices of production factors converges between countries
What model says that good poduced using advanced technology will be exported?
Ricardian model
What models says that goods produced with economies of scale will be exported?
New trade theory (NTT)
What does return to capital mean?
Income generated by using capital such as machinery
What does return to labor mean?
This is the income of the workforce, usually measured in terms of wages and benefits
What does return to land mean?
The land generates returns as rent or the value of what is produced in the land
Which model says that countries trade if they have different technology?
Ricardian model
What is the primary purpose of the International Monetary Fund? (IMF)
To provide short term financial assistance to countries facing balance-of-payments problems
What is the main advantage of a country adopting a floating exchange rate system?
The central bank has greater control over domestic monetary policy (styrränta)
In the content of Trade policy, what is the purpose of and export subsidy
To encourage domestic producers to sell goods in the foreign markets
What is the concept of trade diversion in the concept of regional trade agreements?
When trade shifts from a more efficient exporter to a less efficient one within the trade bloc
