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Indiana State University International Trade and Autarky Questions Papers

Indiana State University International Trade and Autarky Questions Papers

Indiana State University International Trade and Autarky Questions Papers


1. When a country engages in international trade, what is expected to happen to the price ofimported goods compared to autarky? What is expected to happen to the price of exportedgoods compared to autarky? Use the supply and demand model to explain your answers. Youmust include fully labeled diagrams for full credit. How can you use different trade theories toexplain why a state might engage in international trade? Pick a few theories and apply them indepth.

2. Give two reasons why a country might impose a tariff on imported goods. Discuss the possibleeconomic and political tradeoffs that nations make when imposing tariffs – who benefits andwho loses? What are some political and economic reasons reasons for the widespread use oftariffs despite their overall implications for national welfare? How does the WTO try toovercome these reasons? Why doesn’t the WTO always succeed?

3. Describe in detail the three accounts in the International Balance of Payments. What is theBalance of Payments equilibrium condition? How can a country reduce its current accountdeficit? Is a current account deficit always a problem? Why might a country encounter a debtcrisis? What factors might contribute to a debt crisis? How does a state try to overcome such acrisis – and how does this impact its politics and economics – explain.

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