ECONOMICS-2015: Daily Answer Writing Challenge – 11
1) Suppose productivity per unit of labour for two antions, India and UK, is given as under:
India UK
Wheat (kg/manhour) 06 03
Cloth (yard/manhour) 04 02
2) Will mutually beneficial trade be possible for the two nations? If yes, explain whether specialisation shall be complete or not. (2014 – 10 marks)
3) What are the two key conclusions of the Heckscher-Ohlin model of international? Under what assumptions are these conclusions arrived at? (2013 – 15 marks)
4) Why is it that in a pure flexible exchange rate system, foreign exchange market has no direct effects on the monetary base and money supply? Does this mean that the foreign exchange market has no effect on the monetary policy? (2014 – 20 marks)
