Topic: Trade Barriers
Trade barriers are one of the reasons for a failure of the Absolute Purchasing Power Parity (PPP).
Explain, in 1000 words, how trade barriers affect the import or export good’s prices
and the real exchange rate.
• You need to include one example of a country (for example, Australia).
• You need to explain how the country’s trade policy has affected (or will affect) the real
exchange rate.
• You may use equations if necessary.
• Finally, put a word count of your essay, excluding reference.
Answer preview:
