By Dr. Kumarasinghe P J.  How does international trade affect economic growth?  How does trade alter the distribution of income?  How can trade.

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Presentation transcript:

By Dr. Kumarasinghe P J

 How does international trade affect economic growth?  How does trade alter the distribution of income?  How can trade promote development?  Can LDCs determine how much they trade?  Is an outward-looking or an inward-looking trade policy best?

Figure 12.1 Trade with Variable Factor Proportions and Different Factor Endowments

Figure 12.2 The Vent-for-Surplus Theory of Trade in LDCs