IGNOU MEC-107 - International Trade and Development

SECTION A Answer the following questions in about 700 words each. 1. a. Discuss India’s transformation from GATT to WTO. What is India’s contribution to WTO concerning agriculture? b. Describe the role that WTO plays in achieving sustainable development and protecting the environment. 2. a. Country A is a large country while Country B is a small country. Both countries decided to impose tariffs on their imports. What will be the impact of this decision on their producers, suppliers and economy as a whole? Explain with the help of diagrams. b. Is trade still possible between two nations if they have identical production possibilities curves? Explain with the help of a diagram. SECTION B Answer the following questions in about 400 words each. 3. Why do countries engage in Intra-Industry trade? Explain Intra-Industry trade in horizontally and vertically differentiated Commodities. 4. Explain the causes behind the global financial crisis of 2008. What were its macroeconomic effects? What were the policy responses initiated by the U S government to combat the global financial crisis of 2008? 5. a. What does the Rybczynski theorem postulate? Point out the important factors which could be analysed in the context of Rybczynski's theorem. b. Point out five major assumptions of the Heckscher-Ohlin theory. 6. Why is a persistent deficit in the balance of payments undesirable? What policy measures are available to achieve an improvement in a country’s BoP? 7. Write short notes on the following: a) Outward-oriented development strategies b) Environmental Kuznets Curve hypothesis c) The Impossible Trinity d) Fixed versus floating exchange rate