Evaluate the following statements thoroughly (8 marks) a)Trade based on external economies can have ambiguous effects on national and world welfare b)The existence of dynamic increasing returns to scale can potentially provide a ground for protectionism and validate the infant industry argument for protecting a domestic industry

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Question: Evaluate the following statements thoroughly: (8 marks) a)Trade based on external economies can have ambiguous effects on national and world welfare. b)The existence of dynamic

Evaluate the following statements thoroughly: (8 marks)

a)Trade based on external economies can have ambiguous effects on national and world welfare.

b)The existence of dynamic increasing returns to scale can potentially provide a ground for protectionism and validate the infant industry argument for protecting a domestic industry.

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