What autarky is and how has that changed with international economics?, Singapore

Assignment Details:

Question 1 (a) Explain what autarky is and how has that changed with international economics based on comparative advantage and Heckscher-Ohlin theory.

(b) Will a capital-abundant country like Singapore have relatively high or low interest rates as the “price of capital”?

(c) Discuss with trade, for a relatively labour-abundant country like Indonesia which specialises in the production of labour-intensive goods, interest rates will rise or fall. With trade for Singapore as relatively capital-abundant which specialises in the production of capital-intensive goods, will interest-rates rise or fall?

(d) From your answers, what follows with respect to differences in interest rates in Indonesia and Singapore? Will a labourer or capital owner in Singapore, gain more from trade? Will this change over time and how? (25 marks)