Part 4-Stretch Your Thinking-Read the 1978 Milton Friedman quote regarding Japan was unfairly selling the US cheap steel then answer the questions. "Let us suppose, for a moment, that the Japanese flood us with steel. That will reduce employment in the American steel industry, no doubt. However, it will increase employment elsewhere in America. We will pay for that steel with dollars. What will the Japanese do with the dollars they get for the steel? They aren't going to burn them. They aren't going to tear them up. If they would, that would be best of all, because there's nothing we can produce more cheaply than green pieces of paper. And if they were willing to send us steel, and just take back green pieces of paper, I can't imagine a better deal!" 16. Identify who benefited and who was harmed by low cost foreign imports from Japan. 17. What did the Japanese most likely do with the money that was used to buy their steel? 18. What likely happened to the US capital and financial account when Americans purchased large amounts of Japanese steel? Explain. 19. Economists like to point out that people, not countries, engage in trade. Why is this important to keep in mind when debating trade policy or determining if a trade deficit (or surplus) is inherently good or bad?
Part 4-Stretch Your Thinking-Read the 1978 Milton Friedman quote regarding Japan was unfairly selling the US cheap steel then answer the questions. "Let us suppose, for a moment, that the Japanese flood us with steel. That will reduce employment in the American steel industry, no doubt. However, it will increase employment elsewhere in America. We will pay for that steel with dollars. What will the Japanese do with the dollars they get for the steel? They aren't going to burn them. They aren't going to tear them up. If they would, that would be best of all, because there's nothing we can produce more cheaply than green pieces of paper. And if they were willing to send us steel, and just take back green pieces of paper, I can't imagine a better deal!" 16. Identify who benefited and who was harmed by low cost foreign imports from Japan. 17. What did the Japanese most likely do with the money that was used to buy their steel? 18. What likely happened to the US capital and financial account when Americans purchased large amounts of Japanese steel? Explain. 19. Economists like to point out that people, not countries, engage in trade. Why is this important to keep in mind when debating trade policy or determining if a trade deficit (or surplus) is inherently good or bad?
Chapter1: Making Economics Decisions
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Transcribed Image Text:Part 4-Stretch Your Thinking- Read the 1978 Milton Friedman quote regarding the accusation that
Japan was unfairly selling the US cheap steel then answer the questions.
"Let us suppose, for a moment, that the Japanese flood us with steel. That will reduce
employment in the American steel industry, no doubt. However, it will increase employment
elsewhere in America. We will pay for that steel with dollars. What will the Japanese do with
the dollars they get for the steel? They aren't going to burn them. They aren't going to tear
them up. If they would, that would be best of all, because there's nothing we can produce
more cheaply than green pieces of paper. And if they were willing to send us steel, and just
take back green pieces of paper, I can't imagine a better deal!"
16. Identify who benefited and who was harmed by low cost foreign imports from Japan.
17. What did the Japanese most likely do with the money that was used to buy their steel?
18. What likely happened to the US capital and financial account when Americans purchased large
amounts of Japanese steel? Explain.
19. Economists like to point out that people, not countries, engage in trade. Why is this important to
keep in mind when debating trade policy or determining if a trade deficit (or surplus) is inherently
good or bad?
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