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3 Cards in this Set
- Front
- Back
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In what ways can international trade contribute to economic development of a nation? What are its shortcomings? |
1. Can lead to full utilization of domestic resources 2. Makes possible division of labor and economies of scale--by expanding the size of the mkt 3. Vehicle for transmission of new ideas & tech 4. Stimulates int'l flow of capital from developed countries to developing countries 5. Excellent anti-monopoly weapon--stimulates efficiency from domestic producers Shortcomings: - When developing nations gains from trade go to developed nations, there is still dissatisfaction |
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Describe the different terms of trade (commodity, net barter, income, single factoral and double factoral). Which of these terms are most significant for developing nations? |
Commodity/Net Barter - (Px/Py) * 100 Income - (Px/Pm) * Qx Single Factoral - (Px/Pm) * Zx Double Factoral - (Px/Pm) * (Zx/Zm) * 100 |
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