Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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Question
Chapter 18, Problem 17CQ
To determine
Comparison of impact of natural barriers to trade with the human made barriers.
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Suppose the United States passed a law stating that we could not purchase imports from any country that imposed any trade restrictions on our exports. Who would benefit and who would lose from such retaliation?
In intentional trade negotiations, it is very common for a country's trade representative to threaten to enact protectionist policy that include: tariffs, quotas, quota-tariff, national security restrictions, and domestic content requirements. Define what each of these protection policies. Explain why quotas are usually the least creditable threat. If the trade represents a small importing country, would it make economic sense to threaten tariffs? Why or Why not?
Describe benefits from international trade.
Chapter 18 Solutions
Economics: Private and Public Choice
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Similar questions
- Evaluate the effectiveness of artificial trade barriers, such as tariffs and import quotas, as a way to achieve and maintain full employment throughout the U.S. economy. How might such policies reduce unemployment in one U.S. industry but increase it in another U.S. industry?arrow_forwardExplain what may cause a deterioration of the terms of trade. arrow_forwardWhat administrative trade policies are in place in Australia that make it difficult for imports to enter?arrow_forward
- When a country allows trade and becomes an importer of a good, which of the following is NOT a consequence? The price received by domestic producers of the good decreases. The gains of domestic consumers of the good exceed the losses of domestic producers of the good. The gains of domestic producers of the good exceed the losses of domestic consumers of the good. The price paid by domestic consumers of the good decreases.arrow_forwardWhat are the government’s effects on trade ? Why ? Explain them briefly.arrow_forwardTrue/False International trade have a negative impact on the domestic producer of an economy.arrow_forward
- Explain three possible theories of international trade.arrow_forwardWhy would a country want to erect trade barriers such as tariffs or quotas? to expand their markets to stimulate the economy to make goods cheaper to protect domestic jobsarrow_forwardSupporters of the jacket quota over free trade argue that the trade restriction will save jobs in the United States. What are the potential pitfalls of such an argument? Check all that apply. China may retaliate, imposing restrictions on their imports from the United States, thereby generating unemployment in U.S. export industries. Consumers will likely divert large amounts of scarce resources toward lobbying for the removal of the quota. Trade restrictions simply reshuffle jobs by increasing employment in the protected industry and reducing employment in other industries. The costs to domestic jacket consumers may outweigh the benefits of jobs saved in the jacket industry.arrow_forward
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