MEC 007 INTERNATIONAL TRADE
AND FINANCE
December 2019 Question
Paper
Time : 3
Hours] [Maximum Marks : 100
Note :
Attempt questions from each section as per instructions given.
Section - A
Answer
any two questions from this section.
1. What do
you mean by the term 'effective rate of protection'? What are the implications
when the effective rate of protection is
i) equal to
the nominal rate of protection
ii) greater
than the nominal rate of protection and iii) negative
2. a) What
justification is often used by economists to give preference to tariffs over
quotas?
b) Mention
at least two criticisms of the terms of trade argument for protectionism.
Explain the market failure argument for justifying trade protection. What is
the relation between the infant industry and the market failure arguments for
protection?
3. a) What do you mean by Gold standard? Why
is Gold standard considered to be a fixed exchange rate regime? Why was Gold
standard abandoned?
b) Describe
the salient features of the Bretton Woods system. Explain the reasons behind
the demise of the Bretton Woods system.
4. a)
Provide a critical evaluation of the monetary approach to the balance of
payments.
b) What are
SDRs? Discuss their important features.
Section - B
Answer
any five questions from this section.
5. Explain
the causes, as explained by Ricardo, that result in the differences in
opportunity cost and comparative advantage.
6. Examine
the Leontief paradox as an empirical critique of Heckscher-Ohlin theorem.
7.
Critically examine whether exports lead to growth. Is it applicable to INDIA
currently.
8. What were
the reasons behind the growing importance of services in trade? How many modes
of providing services are discussed under WTO's CATS?
9. Explain
the role of Regional Trade Agreements (RTAs) in Global Trade. Briefly discuss
the welfare effects of RTA's both in case of
i) Trade
diversion; and
ii) Trade
creation
10.
"ASEAN is a successful trading bloc". Discuss
11.
Elaborate important export promotion measures including major innovative
schemes launched in recent years.
12. What
does capital account convertibility imply? Why India has been slow in bringing
about capital account convertibility?
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