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International Economy and Globalization (H.W) (Essay Sample)

Find the attachments please. for sources use: 1- International Economics (13th edition) by Richard J. Carbaugh. ISBN-10: 1439038945 2- The World is Flat: a Brief History of the Twenty-first Century by Thomas L. Friedman ISBN-10: 0374292884. ISBN-13: 9780374292881 Write direct short answers to the each of the following questions: 1- What are some of the major arguments for and against an open trading system? 2- What factors influence the rate of growth in the volume of world trade? 3- When is international trade an opportunity for workers? When it is a threat to workers? 4- Summarize the arguments for and against globalization. In your opinion, on balance, is globalization beneficial or detrimental? 5- How did Smith's views on international trade differ from those of the mercantilists? 6- Develop an arithmetic example that illustrates how a nation could have an absolute disadvantage in the production of two goods and could still have a comparative advantage in the production of one of them. 7- Find the attachment and do Q 12 part a and b. TRUE OR FALSE? (Type T or F only) 1. Mercantilists believed that each nation should try to achieve balanced trade, with exports equal to imports. 2. Hume's price-specie-flow doctrine explained why nations would not be able continually to increase their gold holdings through ongoing trade surpluses. 3. Adam Smith believed that the wealth of nations was established primarily through exports used to purchase gold and silver rather than imports. 4. Smith's absolute advantage theory showed that two nations could both gain from trade by exporting products in which their labor productivity was higher than that of the other nation. 5. Ricardo's principle of comparative advantage showed that nations could gain through trade by specializing in production according to comparative advantage, even if one nation had an absolute cost advantage in all products. 6. The transformation schedule for Ricardo's comparative advantage model is bowed out, rather than straight. 7. In Ricardo's comparative model, trade results in complete specialization. 8. With trade between two countries, the equilibrium terms of trade will equal the domestic price ratio that prevailed in the smaller country before trade began. 9. Mill's theory of reciprocal demand shows that the equilibrium terms of trade between two nations depends only on production costs in the two nations. 10. Between two nations of unequal size, most of the gains from trade are likely to go to the smaller nation. Write direct short answers to the following questions: CH1 1. In Friedman's attempt to draw a parallel between himself and Christopher Columbus, he misinterprets Columbus as someone who had to prove to his contemporaries that the world was round. Does this misinformation hurt Friedman's argument by making him less credible? 2. What are the benefits/ detriments of the "world is flat" metaphor? 3. What is Friedman trying to convey with this image? Is the world he describes really flat? 4. Is there another metaphor that would better explain (or explain just as well) what Friedman details in these chapters? CH2 1. How many of the ten flatteners have affected your life? 2. Do you think Friedman left any flatteners out? 3. Is the importance of any of the flatteners he lists overstated? 4. In Friedman's tenth flattener called "steroids". Are "steroids" crucial to success or are the simply luxuries? source..
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International economy and globalization
Proponents of free trade argue that it encourages investment, consumption which in turn leads to economic growth. Additionally, there are various goods on offer and prices are likely to reduce because of competition. On the other hand, opponents of free trade focus on high unemployment and excess production capacity in the system (Carbaugh 26). Trade barriers, globalization, foreign direct investment, and economic stability influence the volume of trade as more countries join international organizations including the World Trade Organization (WTO)
Globalization of international trade presents opportunities and benefits to workers. Workers benefit through the reduction in the cost of consumer goods and the purchase of technologies that complement their working life. In addition, it allows workers to increase productivity through the production of better value goods (Carbaugh 21). Through the exportation of goods workers increase their income and produce more. Nonetheless, some workers suffer because of wage inequalities and rise in unemployment in some industries. Globalization is associated with economic growth in many countries through increased international trade where competition reduces the costs of doing business. Opponents argue that it mainly helps the developed world and is thus not sustainable as it perpetuates wealth inequality.
Smith differed with the mercantilist school of thought by stating that there was international specialization of factor inputs which led to increase in production and sharing of the output among the trading nations. Through absolute advantage nations could maximize gains in the production of goods in which they were best suited (Carbaugh 63).
An arithmetic example with an absolute disadvantage for two, but with a comparative advantage in the production in one of them .There is an assumption that there are two countries United States of America and Brazil which both produce copper and aluminum. Under full capacity production when all factor inputs are maximized USA would yield 1000 tons of copper and 1000 tons of aluminum while Brazil has and 800 tons of copper and 300 tons of aluminum in Brazil. The USA has absolute advantage in the production of both goods. The Opportunity costs of copper in USA is 1 where there are 1000 tons of aluminum for 1000 tons of copper while Brazil has an opportunity cost of 0.375 for 300 tons of aluminum for 800 of copper, the opportunity cost for aluminum in USA 1000 is 1 but Brazil has 2.67 for 800 tons of copper against 300 tons of aluminum. Brazil has a comparative advantage in copper production because of lower opportunity cost at 0.375.
CanadaFranceSteel (tons)5001200Aluminum (tons)1500800
Marginal Rate of Transformation for France in aluminum is – 800/ 1200 which is equal to 0.67 and the MRT of aluminum in Canada is -1500/ 500 which is -3

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