1)The answer to some questions can be both yes and no depending on the situation. 2)The English should be clear and the answers must be purely based on Economic theory. 3) The professor is looking to...

International Trade Assignment
1. Industrial policy is not efficient because it protects inefficient industries.
True / False? Discuss. (4 marks. Maximum 70 words)
Answer:
The statement can be true and false, depending upon the situation.
The statement can be true because industrial policy is often influenced by
political interference which pressurized the executives to design the policy
in a way that protects inefficient industries or promotes one favored by
special interests. Protection of inefficient industries means we are
following anti-competitive policies and not allowing market to work freely
and hence industrial policy is no efficient.
The statement can be ‘false’ because sometimes we do need industrial
policies to promote domestic production. For example; industries which
are new and still in gestation period need some kind of support and
protection from the government. So industrial policies designed in this
direction cannot be called inefficient.
2. Would an increase in an economy’s GDP affect its trade patterns in the
same way as an increase in GDP per capita?
Explain fully. (3 marks. Maximum 70 words)
Answer:
Although, the affect would be same but extent of effect might differ in two
cases. An increase in an economy’s GDP or GDP per capita is likely to
attract more...