Chapter 9: Problem 2
Briefly explain whether you agree with the following statement: "International trade is more important to the U.S. economy than it is to most other economies."
Chapter 9: Problem 2
Briefly explain whether you agree with the following statement: "International trade is more important to the U.S. economy than it is to most other economies."
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Get started for freeAn article in the Wall Street Journal discussing the effect of Chinese imports on the U.S. economy made the following observation: "[China's] emergence as a trade powerhouse rattled the American economy more violently than economists and policy makers anticipated at the time.... The U.S. workforce adapted more slowly than expected." a. What does the article mean that China's emergence as a trade powerhouse rattled the U.S. economy? b. Why didn't economists and policymakers expect the economic effect of imports from China to be as great as it turned out to be? c. In what sense has the U.S. workforce adapted more slowly than expected?
Why might a smaller country, such as the Netherlands, be more likely to import and export larger fractions of its GDP than would a larger country, such as China or the United States?
An article in the New York Times discussed the number of innovative food companies, particularly those selling natural foods, that have become established in Boulder, Colorado, in recent years. According to the article, Boulder has a large number of people with experience in managing food companies, lenders who know the industry, food distributors, and food processing plants. The article quoted one entrepreneur as asserting: "There's an ecosystem here that supports food entrepreneurs that you just don't find in other places. Everything you need, including a lot of experience and expertise, is right here." What advantages does being located in Boulder give to startup natural food firms? In what circumstances can natural food firms located elsewhere overcome these advantages? Are Boulder's advantages likely to persist over time?
An article in the New Yorker stated, "The main burden of trade-related job losses and wage declines has fallen on middle- and lower-income Americans. But ... the very people who suffer most from free trade are often, paradoxically, among its biggest beneficiaries." Explain how it is possible that middle-and lower-income Americans are both the biggest losers and at the same time the biggest winners from free trade.
What are the main sources of comparative advantage?
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