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Question 11 15 points Save Answer Offshoring and VAX Ratio. The figure shows a measure of global value chain (GVC) participation, for various countries and regions in the world. The measure shown is the inverse of the VAX ratio: 1 - VAX ratio 16 2 The Participation of Latin America and the Caribbean in International Supply Chains All goods 50- 30- Percentage 20- 10 SLV NIC 3TM LAC CHL COL ARG BOL PRY PAN BRA MEX URY ASIA ECU HND VEN PER Fig. 2.2 GVC Participation through upstream linkages: foreign value added as a percentage of total exports, average 2003-2007. Source: Authors' calculations based on data from GTAP 7 and 8 Notes: EU-27= European Union, 27 members. LAC = Latin America and Caribbean. GVC = global value chain. Source: Synchronized Factories, IADB, 2014. a. Define the VAX ratio. According to the figure, which countries/regions are better inserted in the GVC? b. Mexico (MEX) and Costa Rica (CRI) seem to be exceptions in Latin America and the Caribbean (LAC). According to the (inverse of the) VAX ratio, how much better inserted into the GVC than the average country in LAC (represented by the bar corresponding to LAC) are MEX and CRI? Give exact numbers. c. State ONE reason related to trade and/or foreign direct investment policy on why Mexico and Costa Rica may fare better relative to the rest of LAC. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 10pt V Ev IE v A v