ECON6016 – Trade and Development Midterm Practice Questions Semester 2 - 2022
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ECON6016 – Trade and Development
Midterm Practice Questions
Semester 2 - 2022
NB: The following questions are meant to give students an insight into the ‘type’ of questions they can expect to see in the midsemester exam. These questions are in no way an exhaustive list, and preparing these questions does not automatically guarantee, in any way, that students will pass the exam. Researching these questions may however provide students a deeper insight into the topics discussed in the class, and facilitate their responses to specific questions asked in the exam. It is strongly recommended that students research, write short answers, and discuss their responses with their peers via Ed Discussion or any other sources deemed suitable. No solution will be provided for these questions.
1. How has the South’s role in the GATT/WTO changed over time? What are the similarities and differences between GATT and the WTO? How successful has the WTO been in global trade governance? What are the competing explanations for the Doha Round problems, and which explanations do you think are the most plausible? In what ways are China, India, and Brazil posing a challenge to DC dominance in the global trade regime?
2. Explain some of the arguments in support of the use of tariffs, quotas, and other trade barriers in developing countries. What is meant by voluntary export restraints? How has the United States used them? Why do nations subsidize exports? To what problems do these subsidies give rise?
3. The "gains-from-trade" theorem tells us that irrespective of what other countries do, free trade is the best policy for any country. Yet countries routinely threaten to pursue restrictive trading practices if their trading partners do so as well. Reconcile these two observations using the arguments in the text.
4. Which countries appear to have benefited the most from international trade during the last few decades? What policies do these countries seem to have in common? Does their experience lend support for the infant industry argument or help to argue against it?
5. It may be optimal for a country to restrict the exports of some commodity for which it is a principal exporter. Examine this statement. In particular, address the question of why individual exporters do not spontaneously impose export restrictions on themselves even if it is optimal for them to do so as a group.
6. Has globalization increased or reduced world poverty? What is the World Bank agenda for reducing world poverty? Why do developing nations want to industrialize? Why might high levels of inequality lead to lower rates of growth and development? Why might it be difficult to get out of this kind of trap?
7. Why do many economists expect income convergence between developed and developing countries, and what factors would you look to for an explanation of why this has occurred for only a limited number of countries and in such a limited degree so far?
8. What are the major problems facing developing countries today? What are their causes? Which region of the world has the largest concentration of poorest countries? Why are these countries so poor? How do developing countries propose to resolve the major problems that they face today? What are the prospects of resolving them in the near future? Why might developing countries with a poorly developed system of income taxes be reluctant to have free trade?
9. What are good economic institutions, why do so many developing countries lack them, and what can developing countries do to get them? Justify your answer.
10.In what ways can RTAs be trade-diverting and trade-creating? In what ways do LDCs receive special treatment as members and associate members of RTAs? What are the most significant divisions within the South? What are OPEC, the NIEs, the BRICS, and the emerging economies? Do these groups have anything in common with the LDCs?
11.Why did LDCs become more actively involved in the GATT Uruguay Round, and what has been their position in the Doha Round? How much priority have GATT and the WTO given to the environment? Is free trade compatible with protection of the environment?
12.Describe Kuznets’s inverted-U hypothesis. Discuss the conceptual merits and limitations of this hypothesis for contemporary developing countries.
2022-09-22