1st Exam Skeleton Notes (Part two)
Week 5 International Trade Theory
• What is Mercantilism’s view on government intervention?
(Mercantilism advocates government intervention to achieve a surplus in the balance of trade)
• How does absolute advantage view International Trade, zero-sum game? Negative-sum game?
Positive-sum game?
• How does comparatively advantage challenge absolute advantage theory?
• Please be aware of the name of the Theorist to his theory (Absolute Advantage, Comparative
Advantage, Distribution Impact of Trade, Product Life Cycle Theory, New Trade Theory, Diamond
