1. Discuss, from both an economic and a political viewpoint, why countries have
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1. Discuss, from both an economic and a political viewpoint, why countries have become increasingly interdependent on each other. Use outside sources to reference at least one trade association and some trade statistics. Be sure to provide the references that you use. If you wish, you can reference the U.S. Census Bureau/Foreign Trade Statistics site for trade statistics. Information on international trade associations can be found by using a search engine such as www.google.com. You will see a variety of trade association Web sites that you may visit for additional information on that particular association. 2. Identify the major fallacies of international trade. 3. How did Smith's views on international trade differ from those of the mercantilists? 4. What factors underlie whether specialization in production will be partial or complete on an international basis? 5. Why is it that pretrade production points have a bearing on comparative costs under increasing-cost conditions but not under conditions of constant costs? 6. How does the Leontif paradox challenge the overall applicability of the factor-endowment model? 7. How does the Heckscher-Ohlin theory differ from Ricardian theory in explaining international trade patterns? How does the Heckscher-Ohlin theory differ from Ricardian theory in explaining international trade patterns? 8. Do recent world-trade statistics support or refute the notion of a product life cycle for manufactured goods? Using one of the Web sites provided for Chapter 3 at the textbook's companion site, research data to support your answer. Be sure to include the data in your answer.Explanation / Answer
FOLLOW THIS China plays host on Thursday to the third summit of Bric nations, as it and other emerging economies increasingly drive global growth. The leaders of Brazil, Russia, India and China will meet on Hainan Island, along with potential new member, South Africa. The term Bric was coined in 2001 by Goldman Sachs economist Jim O'Neill to group together the four fast-rising economies. In recent months their economic might has been matched by their growing political influence. The four are part of the G20, a grouping of the major economies in the world. The Bric countries recovered quickly from the global financial crisis in 2008, proving they were not as vulnerable to a downturn in the US and Europe. With the developed world not looking to do business, these countries are turning to each other, and smaller emerging economies. Brazil Brazil's has traditionally exported commodities and minerals to the US and Europe, but Chinese demand is changing the equation for Brazil's agriculture. The soybean industry in particular has shown rapid growth in order to meet the demand of China's population. This week, China authorised some Brazilian pork producers to start exporting to the country for the first time. "You can see the shift taking place in terms of re-orientation of the Brazilian agriculture towards China," said Benjamin Selwyn, from the International Relations and Development Studies department at the University of Sussex. China is also hungry for Brazil's other commodities, such as iron ore to manufacture steel, which is being used in its huge construction boom. Last year China overtook the US as Brazil's biggest trade partner with more than $56bn in trade. Beyond commodities, Brazil has also found a market in China for some of its manufactured goods. This week Brazilian President Dilma Rouseff signed a deal in China for Embraer, the third largest maker of commercial aircrafts in the world, to sell planes to Chinese airlines, cashing in on the mainland's fast expanding air travel market. Russia Oil produced in Siberia has helped make Russia the world's largest producer of commodities While China may be the world's biggest consumer, Russia is the largest global producer of many commodities. Russia has traditionally been - and continues to be - a large natural resource exporter. However, where it exports to has changed dramatically in the past 10 years. Trade with Asia has increased at the expense of business with the US and former Soviet Union countries. Asia's economic growth, and the push within Russia to develop trade ties outside its traditional partners in Europe, have now made China Russia's largest trade partner, ahead of Germany. "China is Russia's economic future," said Roland Nash, of Verno Investment Research in Moscow. "Both require each other to fuel economic growth. China sets the price for many of the world's natural resources through demand and Russia through supply." India India is a global leader as a provider of services, practically inventing the outsourcing industry. Unlike Brazil and Russia, which have built their economies on commodities exports, India has developed its people. Along with computer services, the medical-care industry has taken huge strides. But it has failed to become a mass manufacturer like the other Bric countries, and as a result still imports much of its manufactured goods from China. This means that although China is now India's largest trade partner, India runs a large trade deficit with the country. "There is an asymmetry in their relationship," said Taimur Baig, from Deutsche Bank. China Continue reading the main story
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