Short Answers – Answer any three questions. Be concise; each response must be no more than one page long. Submit your response via a MS-Word document.
What are the four major economic and political arguments for regional economic integration? If integration is that good, why don’t we see more substantial examples of integration in the world today?
Drawing from the new trade theory and Porter’s theory, outline the case for government policies that would build national competitive advantage in biotechnology. What policies would you recommend that the government adopt? If any of these policies are at odds with the basic free trade philosophy, list the issues.
In most advanced economies, unions often oppose imports from low-wage countries. Due to what they often perceive as ‘unfair’ competition, they often promote an imposition of tariff barriers to protect local jobs. Is the competition unfair as the unions claim? Why or why not? Define why you think such an argument is in the best interest of a) the unions themselves, b) the employees they represent, c) the nation as a whole?
In the 1970s economists observed that trade was growing fastest among industrialized countries with similar factors of production. In some new industries, there appeared to be no clear comparative advantage. The solution to this puzzle became known as the new trade theory. Explain the major arguments related to the new trade theory giving related examples.
What was the general effect of the creation of a single market and a single currency within the EU on competition within the EU? Why did this happen?
Describe two benefits and two costs of FDI, to a host country and a home country. Given that outsourcing is a viable alternative to FDI, what issues should be considered before a firm decides between the two?
Reread “Is Having a Local Content Requirement (LCR) a Good Idea?” (pg. 191).
As a global customer, do you think LCR helps a single country, the global customer, both, or neither? Explain.
Do you think LCRs are prone to abuse by countries in their best interests?
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