MNG4804 Assignment 2 (COMPLETE ANSWERS) 2026 (235255) - DUE 30 August 2026

MNG4804 Assignment 2 (COMPLETE ANSWERS) 2026 (235255) - DUE 30 August 2026; 100% TRUSTED Complete, trusted solutions and explanations. For assistance, Whats-App 0.6.7-1.7.1-1.7.3.9. Ensure your success with us ..... Question 1 – Maximum of 500 words [10] With his Theory of Absolute Advantage, Adam Smith rejects the Mercantilists theory that trade is not a “Zero Sum Game”. It can instead be a “Positive Sum Game” if countries prefer to trade with each other on the basis of products in which they have absolute advantage on. Consequently, if countries are aware of their specialised strengths and efficiency of producing a particular product, trade between countries can be a positive sum game with net gains for all countries involved. Question 2 – Maximum of 1 500 words [25] The Heckscher Ohlin Theory explains that countries should export goods that use their available factors of production more intensively, while importing goods that require factors which are scarce within their economies. A country with abundant labour may therefore specialise in labour intensive goods, while a country with greater capital and technology may specialise in capital intensive production. However, differences in infrastructure, education, technology and access to finance may prevent developing countries from fully using their available resources. This creates a situation where a country may possess large amounts of labour or natural resources but still struggle to compete successfully within international markets. Required: In your essay, and with relevant practical examples, identify and critically analyse how the factor endowments of a developing country of your choice influence its international trade patterns and economic development. Question 3 – Maximum of 500 words [10] With his Theory of Absolute Advantage, Adam Smith rejects the Mercantilists theory that trade is not a “Zero Sum Game”. It can instead be a “Positive Sum Game” if countries prefer to trade with each other on the basis of products in which they have absolute advantage on. Consequently, if countries are aware of their specialised strengths and efficiency of producing a particular product, trade between countries can be a positive sum game with net gains for all countries involved. Required: In your essay, and with relevant examples, identify and critically analyse a case of a developing country of your choice with absolute advantage and the challenges of a trade arrangement with a developed country. Question 4 – Maximum of 1 200 words [20] Regional trade agreements are created to reduce trade barriers and improve economic cooperation among member countries. These agreements may include free trade areas, customs unions, common markets and economic unions. Supporters argue that regional integration increases market access, investment, industrial development and employment opportunities. However, weak economies may experience trade diversion, loss of tariff revenue and stronger competition from more developed member states. Smaller businesses may also struggle to compete with large regional companies that have better technology, financial resources and production capacity. Required: Critically discuss the benefits and challenges of regional economic integration for developing countries by using the African Continental Free Trade Area and other relevant examples. Question 6– Maximum of 1 200 words [20] Protectionism refers to government actions that limit foreign competition through tariffs, import quotas, subsidies, regulations and other trade restrictions. Governments may use these measures to protect new industries, preserve employment, improve national security or reduce dependence on foreign goods. However, protectionism may increase prices, reduce consumer choice and encourage inefficient local production. It may also lead to retaliation from trading partners, which can reduce exports and damage international economic relations. The challenge is therefore to protect important national interests without creating long term dependence on government support. Required: Using practical examples, critically analyse whether protectionism promotes or weakens the economic development of developing countries participating in international trade. Question 7 – Maximum of 1 200 words [20] The Iran War code named Operation Epic Fury, by the United States (US) in which Israel and the United States of America act together against Iran, is a major global economic and political concern. The war already claimed many lives and infrastructure in affected countries and Iran neighbours. Globally, countries tread carefully not to press the button that could lead to what the world does not want; World War 111. The war threatens foreign policy relations and international trade. 4 Required: Critically elucidate on the effects of this war on international trade. Question 8– Maximum of 2200 words [30] At the heart of Richardo’s Theory of Comparative Advantage, is the need for free trade for all countries in order to see the benefits of international trade. A country should, therefore, specialise in the production of those goods that it produces most efficiently and to buy the goods that it produces less efficiently from other countries, even if it means buying goods from other countries that it could produce more efficiently itself. His basic message is that potential world production is greater with unrestricted free trade than it is with restricted trade. And yet, some arguments persist that free trade may not be a beneficial exercise for all trade partners. Required: Using practical examples and the Mercantilist Theory, critically discuss how unequal power between trading countries may undermine the success of Free Trade between them. Question 9 – Maximum of 1 500 words [25] Foreign direct investment occurs when a company or investor from one country establishes or acquires a lasting business interest in another country. Developing countries often attract foreign investment because it can provide capital, employment, technology, skills and access to international markets. However, foreign investors may transfer profits abroad, exploit natural resources, weaken local businesses or influence government policy. Poor labour conditions and environmental damage may also occur when governments reduce standards to attract international companies. Foreign investment can therefore support development while also creating serious economic and social concerns. Required: In your essay, critically analyse the effects of foreign direct investment on the economy of a developing country of your choice, using relevant examples to support your discussion. Question 10 – Maximum of 1 500 words [25] More often, trade policies are put into place to protect local suppliers against foreign markets. There are basically eight main instruments used in trade policy for such protection. They are import and export tariffs, bans, subsidies, import quotas, voluntary export restraints, local content requirements, administrative policies and anti-dumping policies. In the midst of the prevalence of all these instruments, the benefits of trade policies remain skewed; and biased towards producers and government, and consumers relatively excluded from benefits. The government benefits in terms of revenue collection, while producers benefit marginal profits from their production sales. Required: By means of practical examples, critically analyse the effectiveness of the instruments used by your country, and how they can ensure that trade policy can be of maximum benefit to the local consumers. Technical Question 11– Maximum of 1 200 words [20] Exchange rates influence the prices of imports and exports and therefore affect the international competitiveness of a country. When a local currency becomes weaker, exports may become cheaper for foreign buyers, while imported products become more expensive for local consumers and businesses. A weaker currency may therefore increase export earnings, but it may also increase inflation and production costs where industries depend on imported machinery, fuel or materials. Stronger currencies can reduce import prices, although they may make local exports more expensive in foreign markets. Required: Critically explain how changes in exchange rates affect international trade, inflation, business costs and consumers within a developing country of your choice. Question 1 – Maximum of 500 words [10] With his Theory of Absolute Advantage, Adam Smith rejects the Mercantilists theory that trade is not a “Zero Sum Game”. It can instead be a “Positive Sum Game” if countries prefer to trade with each other on the basis of products in which they have absolute advantage on. Consequently, if countries are aware of their specialised strengths and efficiency of producing a particular product, trade between countries can be a positive sum game with net gains for all countries involved. Question 2 – Maximum of 1 500 words [25] The Heckscher Ohlin Theory explains that countries should export goods that use their available factors of production more intensively, while importing goods that require factors which are scarce within their economies. A country with abundant labour may therefore specialise in labour intensive goods, while a country with greater capital and technology may specialise in capital intensive production. However, differences in infrastructure, education, technology and access to finance may prevent developing countries from fully using their available resources. This creates a situation where a country may possess large amounts of labour or natural resources but still struggle to compete successfully within international markets. Required: In your essay, and with relevant practical examples, identify and critically analyse how the factor endowments of a developing country of your choice influence its international trade patterns and economic development. Question 3 – Maximum of 500 words [10] With his Theory of Absolute Advantage, Adam Smith rejects the Mercantilists theory that trade is not a “Zero Sum Game”. It can instead be a “Positive Sum Game” if countries prefer to trade with each other on the basis of products in which they have absolute advantage on. Consequently, if countries are aware of their specialised strengths and efficiency of producing a particular product, trade between countries can be a positive sum game with net gains for all countries involved. Required: In your essay, and with relevant examples, identify and critically analyse a case of a developing country of your choice with absolute advantage and the challenges of a trade arrangement with a developed country. Question 4 – Maximum of 1 200 words [20] Regional trade agreements are created to reduce trade barriers and improve economic cooperation among member countries. These agreements may include free trade areas, customs unions, common markets and economic unions. Supporters argue that regional integration increases market access, investment, industrial development and employment opportunities. However, weak economies may experience trade diversion, loss of tariff revenue and stronger competition from more developed member states. Smaller businesses may also struggle to compete with large regional companies that have better technology, financial resources and production capacity. Required: Critically discuss the benefits and challenges of regional economic integration for developing countries by using the African Continental Free Trade Area and other relevant examples. Question 6– Maximum of 1 200 words [20] Protectionism refers to government actions that limit foreign competition through tariffs, import quotas, subsidies, regulations and other trade restrictions. Governments may use these measures to protect new industries, preserve employment, improve national security or reduce dependence on foreign goods. However, protectionism may increase prices, reduce consumer choice and encourage inefficient local production. It may also lead to retaliation from trading partners, which can reduce exports and damage international economic relations. The challenge is therefore to protect important national interests without creating long term dependence on government support. Required: Using practical examples, critically analyse whether protectionism promotes or weakens the economic development of developing countries participating in international trade. Question 7 – Maximum of 1 200 words [20] The Iran War code named Operation Epic Fury, by the United States (US) in which Israel and the United States of America act together against Iran, is a major global economic and political concern. The war already claimed many lives and infrastructure in affected countries and Iran neighbours. Globally, countries tread carefully not to press the button that could lead to what the world does not want; World War 111. The war threatens foreign policy relations and international trade. 4 Required: Critically elucidate on the effects of this war on international trade. Question 8– Maximum of 2200 words [30] At the heart of Richardo’s Theory of Comparative Advantage, is the need for free trade for all countries in order to see the benefits of international trade. A country should, therefore, specialise in the production of those goods that it produces most efficiently and to buy the goods that it produces less efficiently from other countries, even if it means buying goods from other countries that it could produce more efficiently itself. His basic message is that potential world production is greater with unrestricted free trade than it is with restricted trade. And yet, some arguments persist that free trade may not be a beneficial exercise for all trade partners. Required: Using practical examples and the Mercantilist Theory, critically discuss how unequal power between trading countries may undermine the success of Free Trade between them. Question 9 – Maximum of 1 500 words [25] Foreign direct investment occurs when a company or investor from one country establishes or acquires a lasting business interest in another country. Developing countries often attract foreign investment because it can provide capital, employment, technology, skills and access to international markets. However, foreign investors may transfer profits abroad, exploit natural resources, weaken local businesses or influence government policy. Poor labour conditions and environmental damage may also occur when governments reduce standards to attract international companies. Foreign investment can therefore support development while also creating serious economic and social concerns. Required: In your essay, critically analyse the effects of foreign direct investment on the economy of a developing country of your choice, using relevant examples to support your discussion. Question 10 – Maximum of 1 500 words [25] More often, trade policies are put into place to protect local suppliers against foreign markets. There are basically eight main instruments used in trade policy for such protection. They are import and export tariffs, bans, subsidies, import quotas, voluntary export restraints, local content requirements, administrative policies and anti-dumping policies. In the midst of the prevalence of all these instruments, the benefits of trade policies remain skewed; and biased towards producers and government, and consumers relatively excluded from benefits. The government benefits in terms of revenue collection, while producers benefit marginal profits from their production sales. Required: By means of practical examples, critically analyse the effectiveness of the instruments used by your country, and how they can ensure that trade policy can be of maximum benefit to the local consumers. Technical Question 11– Maximum of 1 200 words [20] Exchange rates influence the prices of imports and exports and therefore affect the international competitiveness of a country. When a local currency becomes weaker, exports may become cheaper for foreign buyers, while imported products become more expensive for local consumers and businesses. A weaker currency may therefore increase export earnings, but it may also increase inflation and production costs where industries depend on imported machinery, fuel or materials. Stronger currencies can reduce import prices, although they may make local exports more expensive in foreign markets. Required: Critically explain how changes in exchange rates affect international trade, inflation, business costs and consumers within a developing country of your choice.