Required Question # XXXXXXXXXXShort answer questions: ( You are required to answer a, b, and c ) a) What is mercantilism ? What is the relevance of mercantilism to today’s international political...

Required Question # 11. Short answer questions: ( You are required to answer a, b, and c ) a) What is mercantilism ? What is the relevance of mercantilism to today’s international political economy ( one or two paras. maximum). b) What is absolute advantage? and what is comparative advantage? Construct a numerical example using two countries and two commodities. Name the countries England and Portugal. Assume the commodities are cloth and wine. Assume everything is produced by labor alone and that prices are proportional to labor time that is required for production of each commodity. This is a very simple question (you need just four numbers and say Portugal has A.A. in cloth or wine ) etc. You also need to answer which county has comparative advantage in which commodity ( wine or cloth) etc. . c) What is weaponization of the reserve currency? Explain how this is taking place in today’s world economy ? which country is using t its currency as a “weapon” in the world economy to enforce economic sanctions on other countries ? ( we discussed in in Class sessions ) Required Question # 2 2. The U.S. is the leader of the world economy and it has been the leader since WWII. What are the reasons for the U.S. to become the leading economy and (military power) throughout the cold war and in the aftermath of the “ fall” of the Soviet Union ? ( Hint: think about the competitive advantages of U.S. firms in the world economy- in the “real world”) Since the 1980s, neoliberal policies ( instituted by Ronald Reagan and Margaret Thatcher and also known as the Washington Consensus ) have been adopted in many countries. A cornerstone of these policies is trade liberalization, and international trade has been increasing until very recently. There is currently, a challenge coming from China, and possibly other regions (EU) or countries to the position of the U.S. as the leader of the world economy, and the U.S. is “allowing” this challenge to take place. Explain how China is challenging the U.S in its position as the leader of the world economy? what should or what can the U.S. be doing in terms of economic policies, in general, to prop the competitive power of U.S. Companies in the long run ? (Hint : think which U.S. firms are the most successful in the world economy at present and why they are successful) do you think protective tariffs will be helpful in the long run ? ( such as those on steel and aluminum or solar panels ? To what extent are trade wars about “international trade” in your view ? Explain why they are or why they are NOT about additional aspects of the world economy. 3. What are the constituent elements of the world economy ? explain by providing 3 concrete examples from today’s world economy. When possible, in your examples also refer to historical examples ( Hint; think of the “world economy of the 13th century and our discussion of history of the world economy in class ).Bonus Question : 4. Adam Smith argued against the Mercantilists, and argued that impediments to trade should be lifted. What is the basis for absolute advantage according to Smith ? What are the various benefits of international trade according to Smith ? according to Smith, why does expanding your market beyond your borders and specialization benefit all countries ? Can we actually make a case of protectionism starting with Adam Smith’s assumptions ( hint pin factory and infant industry argument for protectionism ) .. Is it always good to have “ Free trade” ( Hint there is no such thing as ‘free trade” in the real world ! Hint think of the article by Branko Milanovic )