world of economics

Partial equilibrium analysis of tariff

Introduction All nations impose some restrictions in the form of tariff (i.e., import tariff and export tariff) and non-tariff barriers (i.e., import quota, dumping, international cartels and export subsidies) on the free flow of international trade.  Since these restrictions and regulations deal with the nation’s trade or commerce, they are generally known as trade or commercial policy. Trade restrictions are...
world of economics

General equilibrium analysis of tariff

Introduction General equilibrium analysis of a tariff is most appropriate when the effect of tariff is examined on the nation as a whole. General equilibrium analysis is more complex in nature. General equilibrium analysis makes use of production possibility curves/ production frontiers/ transformation curve, community indifference curves, or offer curves. General equilibrium analysis of a tariff is generally studies in...
world of economics

The Optimum Tariff

Introduction Optimal tariffs allow a country to exploit its market power in international trade. A country can improve its terms of trade by unilaterally restricting its exports if it faces a downward-sloping demand for them or restricting its imports if it faces an upward-sloping foreign export supply. This argument against unilateral free trade is over 150 years old but it...
world of economics

Theory of Interest

Introduction Interest is a reward for capital. But there are two concepts of interest. Once concept of interest is the real rate of interest which is the rate of return on physical capital such as machine, vehicle, tractor created for the purpose of producing more goods.A capital asset is used for production for several years and yields a stream of...
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