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This 2 page Class Notes was uploaded by Miss Tamia Jakubowski on Monday October 5, 2015. The Class Notes belongs to ECO281 at Central Michigan University taught by MichaelShields in Fall. Since its upload, it has received 20 views. For similar materials see /class/218954/eco281-central-michigan-university in Economcs at Central Michigan University.
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Date Created: 10/05/15
Be able to explain Infant Industry argument for protecting an industry An infant industry is a potentially competitive industry temp trade protections are placed on imports in that industry industry becomes more efficient and competitive tariffs are removed even if industry doesn t become competitive Explain and contrast classical trade theory and neoclassical trade theory explain impact of freer trade on wage rates and profit rates Neoclassical Capital Abundantlot of capital per worker Labor Abundantmany workers per unit of capital Capital intense goodsgoods that require much capital labor intensive goodsgoods require lots of labor labor intensive nations trade for goods from capital abundant and vice versa freer trade raises abundant factor and helps economy Classical Freer trade larger market more specialization greater productivity as labor is more productive wage rates and profit rates rise better economy In general free trade increases total productivity and creates peace Explain and discuss Japans trade policy and compare it to the infant industry argument see infant industry argument Japans policy place tariffs to protect industry tax subsidies hidden protections and continued help depends on success Japan continues to protect successful industries but removes protections for unsuccessful industries Taiwan is noted for many pragmatic shifts in its industrialization policy be able to explain and discuss these shifts small scale import substitution 1950 s export promotion 1960 to early 70 s large scale import substitution 1970 s market oriented approach 1980 s to 1990 s Small scale import substitutes shoes bikes toys easy to import mostly for entrepreneurs gov plays small role tariffs more general quotas in some industries clothing and textiles prosper industry died out Export Promotion thought goods were too primitive gave incentives to export rebates on tariffs subsidized loans exported old import substitute goods textiles garmets toys formed cartels 1960 to 1970 exports grew 27 Large Scale Import Substitutes attempt to diversify substitution stressed capital intensive industries steel shipbuilding refining many failed but some like steel prospered automobile industry started joint ventures failed ventures closed in 1981 shifted to free market approach from there Be able to explain and discuss land reform in Korea and its self help program Japanese held land was distributed to more prosperous Koreans redistributed to small farmers in 1949 50 diversified agriculture in 1960 s Infrastructure investment in 1950 s rice yields increased Self Help Program 1971 government provided materials community produced labor focused on rural development Explain why korea had low savings and high inflation explain why these two were related and what korea did that dramatically reversed this condition shallow finance depth of finance is measured by assetsGDP increases as GDP increases high inflation rate is caused by large gov deficits and growth in money supply government had restrictions on financial markets gov sets interest rates very low or negative real interest rate real int rate int rate inflation rate reduces savings people look for inflation hedges which are gold foreign bank accounts real estate led to low savings and high foreign debt this eliminated gov deficit raised taxes reduced spending Explain Koreas industrialization policy the structure of its industries and compare this to Japans Active government planning guided capitalism in Japan more power to government bureaucracies gov controlled banks gov provided infrastructure established heavy industry but many operations failed Moved to targeting vs direct control overcome weak entrepreneurship used tax incentives loans from state controlled banks chaebol emerged compare to Japans Discuss land reform and agricultural policy in Taiwan agricultural policy extracted savings from agriculture land taxes marketing boards makes wholesalers buy from board created higher input costs gradually phased out previous steps land reform very unequal distribution of land farmers were renters and sharecroppers 1949 reform reduction of rentrent controls sale offormerly Japanese land 1953 reform a redistribution of land industrial bonds in compensation like Japan greater incentives to produce because it was their land farm consumption and investment rose Discuss Japans WWII reforms that were made in Japan in agriculture industry and bureaucracy Land reform divided large land holdings sudden and massive redistributed wealth improved productivity compensated large land owners with industrial bonds Industrial eliminated Zaibatsu new firms new leaders offirms eventually keiretsu were formed and reformers back off a little on antitrust independent labor unions Political Bureaucracy representative democracy purged old bureaucracy brought in new people with new ideas effective and efficient growth oriented financial aid ended reparations Chaebol larger zaibatsu industrial and financial business conglomerates or partners Real interest rate Interest rate inflation rate Inflation hedge An investment with value gold real estate foreign bank account Self Help Program gov provides materials community provides labor focused on rural development Import substitution policy that places specific tariffs on particular industry to encourage production Infant Industry Argument See essay on infant industry Tariff tax on imports The two missions of US policy in Asia were to AModernize China and colonize the Philippines Richard Nixon shook Mao s hand ATrue Which Japanese company signed a contract with the UAW and is located in Detroit CMazda Which country was once the biggest lender to Asia is now the biggest borrower BThe US Confucianism encourages CBoth A amp B loyalty to the rm and individualism In Singapore the government encourages births to BWomen with high education Entrepreneurs displace Civil Servants
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