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Question: 5 10 a recent issue of the economist magazine reports...

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5. 10] A recent issue of the Economist magazine reports that the Netherlands has a current account surplus of 10.1% of GDP a. [5 points] What would you expect to be true regarding investors perceptions of the attractiveness of investing in assets in the Netherlands relative to assets in other countries? Please select one response and explain in 1-2 sentences. More attractive Less attractive Similar attractiveness b. [5 points] Over the past decade, there have been repeated calls by policy-makers to reduce global imbalances (current account deficits and current account surpluses). Assume the Netherlands reduced its current account surplus. What would you expect to happen to private investment in the Netherlands as a result? Please explain in 1-2 sentences. 6. 1301 Trade in Africa Source: https://www.cconomist.com/finance-and- economics/2017/12/07/african-countries-are-building-a-giant- African countries are building a giant free-trade area They have long traded with the world, now they want to trade with each other Dec 7th 2017 KAMPALA AFRICA must unite, wrote Kwame Nkrumah, Ghanas first president, in 1963, lamenting that African countries sold raw materials to their former colonisers rather than trading among themselves. His pan-African dream never became reality. Even today, African countries still trade twice as much with Europe as they do with each other. But that spirit of unity now animates a push for a Continental Free-Trade Area (CFTA), involving all 55 countries in the region. Negotiations began in 2015, aimed at forming the CFTA by the end of this year. In contrast to the WTO, African trade talks are making progress. The chart below shows average educational attainment for men aged 15-49 in 2015. The chart shows considerable variation in educational attainment across African countries. (A map of Africa with country names is included for your reference.) Source: https://www.nature.com/articles/nature25761 Atrica
Imagine a 2-country, 2-product world where the two countries are South Africa and Ethiopia. The two and apparel. Assume computers are more skill intensive than apparel. products are computers a. [5] Before trade, where would you expect computers to have a lower relative price? Please select an answer South Africa Ethiopia Same in both countries b. [5] Please explain briefly Now assume that trade barriers fall between South Africa and Ethiopia c. [5] Which product would you expect Ethiopia to export? Please select an answer Computers Apparel Ethiopia would not export d. [S] Please explain briefly. Now assume that Ethiopia invests in education and raises educational attainment. Nothing changes in South Africa. e. [5] What would you expect to happen to the amount of trade between Ethiopia and South Africa in the simple 2-product, 2 country model? Increase Decrease Stay the same f. [5] Please explain briefly.
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