Question

If Britain leaves the free trade market why would they lose comparative advantage in services? can...

If Britain leaves the free trade market why would they lose comparative advantage in services? can you use examples/diagrams please

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Currently Britain can export and import to various other members of European Union without any import duties or taxes. Almost 44% off the exports done by United Kingdom are diverted towards European Union members. London is considered to be the financial hub of the European Union and most of the financial services hover around it. If Brexit happens then it would imply that Britain have to leave European Union and would no longer be trading with the members of European Union freely. It will therefore lose its comparative advantage in services. According to an estimate for every one percent loss in the exports to European Union members there will be a half percentage loss in the GDP. It is in this sense that if Britain decides to leave European Union then its own GDP growth rate when fall even when its currency is depreciating and it may be able to sign new deals with other countries.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What are the pros and cons of comparative advantage and free trade? Provide at least two...
What are the pros and cons of comparative advantage and free trade? Provide at least two examples.
We have talked quite a lot about comparative advantage and the benefits of free trade in...
We have talked quite a lot about comparative advantage and the benefits of free trade in this class. By focusing on producing what you produce at a lower opportunity cost in comparison to others and trading for things where you have a higher opportunity cost of producing, you can have access to more goods and services than if you tried to produce them all yourself. Another way to think about it is that by putting resources into their best use...
Why is comparative advantage rather than absolute advantage the basis for trade?
Why is comparative advantage rather than absolute advantage the basis for trade?
What is comparative advantage, and why is it important in international trade?
What is comparative advantage, and why is it important in international trade?
Theories of absolute and comparative advantage contribute to the interpretation of the international trade process. With...
Theories of absolute and comparative advantage contribute to the interpretation of the international trade process. With that in mind, here are some examples of products where you can implement an absolute and comparative advantage in every country you are commissioned to study: 1) Cars 2) Petroleum 3) Computers 4) Medicines 5) gone Discuss the possibility of Italy and oman having an absolute advantage, a comparative advantage, or a lack of a specific advantage for each product
Draw diagrams and explain in detail. a. Compare the Theory of Comparative Advantage with the Neo...
Draw diagrams and explain in detail. a. Compare the Theory of Comparative Advantage with the Neo Classical Theory. Explain the Autarky and Free Trade situations in both; give diagrams and explain what happens when the country moves from Autarky to Free Trade. b. Are there any gains from trade in both these theories? If yes, please give details.
If you use a souce, please list it here. What is free trade, and how does...
If you use a souce, please list it here. What is free trade, and how does the theory of comparative advantage support free trade? What are exchange rates and how are they determined?
Q: The comparative advantage argument in defense of free trade deteriorates when, A) Three countries and...
Q: The comparative advantage argument in defense of free trade deteriorates when, A) Three countries and three products are compared. B) The principle of increasing opportunity cost is present. C) Markets are not assumed to be static. D) All of the above. E) None of the above.
Is it to your advantage to trade stock in the international market? Would you get value...
Is it to your advantage to trade stock in the international market? Would you get value for your American currency? What is the value of the Euro in relationship to the US dollar? Do you feel that the Euro or any other currency can really challenge the US dollar as the dominant currency in the World? Why or why not?
explain comparative advantage in more detail Describe how tariffs can restrict international trade with real life...
explain comparative advantage in more detail Describe how tariffs can restrict international trade with real life event.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT