Research shows that currency costs represent 14% of the border-related costs that contribute to the total of 74% markup represented by trade costs,...

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3. Research shows that currency costs represent 14% of the border-related costs that contribute to the total of 74% markup represented by trade costs, in the final price of goods. 3a. To what extent do you think then that a currency union such as the Euro area would increase free trade, compared to reducing tariff and non-tariff barriers? (1 point) 3b. How would you reconcile your answer to part a when you consider the trade data in the adjoining figure showing Euro-area trade before and after the Euro was created in 1999? Note: DK, SE and UK are European countries that do not use the Euro currency, but are part of the European Union. Intra-euro means trade between countries that use the Euro currency; extraeuro means trade by Euro-currency countries with the rest of the world. (2 points)4. Suppose that when trade with the rest of the world begins, country A begins to import textilesa low-skill, labor-intensive good. a) What is likely to be the effect of trade on wages of different types of workers in country A? Explain why in detail? (2 points) b) Which group of citizens in country A would you expect to support free trade and why? Why would oppose free trade and why? (2 points)5. All else being equal, if a nation decided to intervene in free trade anyways, which of the following policy options would be most beneficial to the country and which would be the least beneficial? Please explain your answer clearly for full credit: Tariffs, Quotas and Voluntary Export Restraints (3 points)6. Intellectual property (IP) is one of the most important areas of study in international business. Your textbook discusses TRIPS and attempts to harmonize IP laws across countries. Nevertheless IP laws continue to be less than harmonized across countries. Please answer the following questions analytically. Why do we have IP laws in the first place, especially separate from property laws that already exist? Given the existence of these laws, what explains why for instance in the US we have a 17 year time period for patents, or 70 years after life for copyright, etc? In other words, where do these numbers come from? Finally, why do different countries differ in their IP laws? For example, most countries have different time periods for patents and copyrights, as well as different systems (first-to-file versus first-to-invent) for determining IP ownership. While answering the last part of this question, please consider cultural, economic, social, political, religious and other factors that might explain IP differences. (4 points)

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Research shows that currency costs represent 14% of the border-related costs that contribute to the total of 74% markup represented by trade costs,...

  • Written in: 17-Oct-2019
  • Paper ID: 418804
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