The minimum level of quota to have an impact on the trade and the conditions when the net welfare loss from an import quota exceeds the net welfare loss from equivalent tariff.

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Some people say that since inflation can be reduced in the long run without an increase in unemployment, we should reduce inflation to zero. Others believe that a steady rate of inflation at, say, 3 percent, should be our goal. What are the pros and cons of these two arguments? What, in your opinion, are good long-run goals for reducing inflation and unemployment?

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Chapter 19, Problem 2.5PA

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The minimum level of quota to have an impact on the trade and the conditions when the net welfare loss from an import quota exceeds the net welfare loss from equivalent tariff.

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