Question: Explain what would happen in the DFS model to relative wages and the pattern of trade if there is a uniform increase in productivity in

Explain what would happen in the DFS model to relative wages and the pattern of trade if there is a uniform increase in productivity in all industries in the foreign country. What will happen to real income in each of the two countries? Why?

Step by Step Solution

★★★★★

3.30 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Increases in foreign country productivity will cause the A a 2 a 1 curve to shift ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

678-B-E-I-E (351).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Suppose the U.S. government creates a fiscal stimulus by sending people checks representing temporary tax cuts. a. Explain and draw a graph to illustrate the effect of this fiscal stimulus payment on...

Explain what would happen in Problem 8 if international capital flows were perfectly elastic.

Assume that SSC has an $800,000 capital budget planned for the coming year. You have determined that its present capital structure (60% equity and 40% debt) is optimal, and its net income is...

(Requires appendix material) Explain what would happen in the DFS model to relative wages and the pattern of trade if there is a uniform increase in productivity in all industries in the foreign...

Answers explained 1- The data collected for USA over the period of 1950-2010. The following equation is estimated log(Dt)=-2.88+1.06log(Y.) (0.12) (0.293) where D. is defense expenditure and Y is...

This is International Business and Trade subject. Please help me answer the following (briefly and concisely): 1. Differentiate Vertical and Horizontal Foreign Direct Exchange Decisions. 2. What do...

Carefully analyze and answer the questions. 1. Consider the numerical examples of exercise 1 and 2 on page 52 in Krugman and Obstfeld (8th Edition). Draw the production possibility frontier for each...

Everything else constant, the international trade effect indicates that aggregate expenditures in the domestic economy fall when: A) domestic prices fall relative to foreign prices. B) domestic...

For the project, Students should read Chapter 19 and then write a short Chapter Summary, T he world is a giant shopping mall, and Americans are big spenders. For example, the U.S. population is less...

Growth Rates based on the result in Problem 31, show that the internal and sustainable growth rates are as given in the chapter. S = Previous years sales A = Total assets D = Total debt E = Total...

Find the row interchanges that are required to solve the following linear systems using Algorithm 6.1. a. x1 5x2 + x3 = 7, 10x1 + 20x3 = 6, 5x1 x3 = 4 b. x1 + x2 x3 = 1, x1 + x2 + 4x3 = 2, 2x1 x2...

The outcomes for consumers are expected to be quite different if a market is purely competitive rather than purely monopolistic. List some of the differences you would expect and explain your choices.

Quality of Fibonacci-Generated Numbers Analyze and visualize the planes in the unit cube, on which all points fall that are generated by the Fibonacci recursion Ui+1 := (Ui + Ui1) mod 1 . Exercise...

Recently, a growing labor shortage has been causing Chinese wages to rise. If this trend continues, what would you expect to see happen to external economy industries currently dominated by China?...

In our discussion of labor market pooling, we stressed the advantages of having two firms in the same location: If one firm is expanding while the other is contracting, its to the advantage of both...

1) You are the president and chief executive officer of a family owned manufacturing firm with assets of $45 million. The company articles of incorporation and state law place no restrictions on the...

Consider the following information on the stock portfolio of the Meter Maid Retirement Fund: What is the beta coefficient of this portfolio? 0.625 0.730 0.835 0.940 1.045

please help, i do not know what i am misisng while completing these problems, i am not getting a 100% 6. Future value of annuities Aa Aa E There are two categories of cash flows: single cash flows,...