International Political Economy Study Guide

Income elasticity of demand {Ans: How change in income effects demand. If low, then a large increase in income produces little change in demand}4 Types of Regional Trade Agreements {Ans: 1. Preferential Trade agreement (PTA) 2. Free Trade Agreement (FTA) 3. Customs Unions (CU) 4. Common Market (CM)}stopper-samulson theory {Ans: trade increases real returns for owners of the factor of production with which the economy is relatively abundantly endowed, while it reduces real returns for owners of the scarce factor of production increased trade lowers the price of the imported good, leading to a reduction in its domestic production and freeing up more of the factor it uses relatively intensively (the scarce factor) than is demanded elsewhere in the economy at existing prices.}Hurde {Ans: for collective action to work there has to be no excludability (members can only benefit if they contribute) and minimize cost for members (all pay a little and overall all reap great returns)}90% and above {Ans: the burden of truth in social sciences}1- Easy ISI {Ans: Develop the domestic manufacturing of simple goods. (low skilled labor, simple machines). Craw labor from agriculture to manufacturing and allow labor to develop skills}ISI