Examination world economy - MEI

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Problem number 1
Terms: Explain the difference between the theories of absolute and comparative advantage in international trade as an example of trade between Germany and Russia, if Russia exports oil and weapons, and Germany - machinery and automobiles. For some couples export-import goods can be traced action theory of absolute advantages, and for some - comparative advantage.
Problem number 2
Terms: What is the theory best explains the following situation: England exports to the German computers, and Germany to England automobiles. Give a detailed answer.
Problem number 3
Terms: You are an advisor of the Latvian government, the main revenue which brings the agricultural sector. Government to support agriculture decides to impose additional duties on imported products of the industry. It selects from two options, either to increase tariffs on imported milk by 15% or increase of 25% duty on cheese and introduce a tariff quota for this product.
Which option do you recommend to the Government in terms of stimulating the development of national agriculture.
Problem number 4
Terms: The forecast of the world economy by the year 2000 is reduced to the following events:
• Higher oil prices to $ 11. Per barrel in mid-1998 to $ 20. Per barrel;
• Increased demand for gold due to distrust of the dollar as the main reserve currency in connection with the introduction of the euro;
• An increase in the rate of economic growth in Europe in connection with the transition to a single currency;
• Increase the flow of foreign direct investment in the countries of Eastern Europe and the former Soviet Union 5 times; • The rise of the global arms market due to the worsening political tensions in the South and South-East Asia;
• The deepening economic crisis in the newly industrialized countries of Asia;
• Economic integration of Russia, Belarus, Ukraine and Kazakhstan, with the resumption of a single ruble zone.
Imagine that you are a dealer monetary adviser office and you are required to answer the question about the future behavior of the following currencies: US dollar, German mark, the Japanese yen, the Russian ruble.
Problem number 5
Terms of Croatia wants to stabilize the exchange rate of its currency against the German mark. Economic growth in Germany amounted to 7% a year in Croatia 2%. Money supply in Croatia increased by 15%, in Germany by 5%. Expected inflation in Croatia 8%, in Germany - 2%. What are the means of internal and external macroeconomic policies should use Croatia to provide the desired stabilization.

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