Question
The war between country A and B has heightened uncertainty and unsettled commodity markets in Asia. The war against B and sanctions on A are
The war between country A and B has heightened uncertainty and unsettled commodity markets in Asia. The war against B and sanctions on A are hitting economies around the globe, with emerging market and developing countries in the Europe and Central Asia region expected to bear the brunt, says the World Bank's latest Economic Update for the region. The Asian Development Bank said developing Asia is expected to grow by 7.1% this year, lower than its previous forecast of 7.3%. Someone argues that, the war between A and B mainly affects the Asian economy through rising commodity prices, especially crude oil. (1) Please describe the mechanism by which international trade is formed. (2) Please use the international trade theory to explain the argument of "the war between A and B mainly affects the Asian economy through rising commodity prices" . (3) About 60% of A oil exports go to OECD Europe, and another 20% go to China. Please analyze the possible short-run and long-run impacts of the war against B and sanctions on A on China's commodity and factor markets.
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