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Chapter 34: Q. 8 (page 832)

How does the cost of "saving" jobs in protected industries compare to the workers' wages and salaries?

Short Answer

Expert verified

It decreases the jobs of workers who worked in unprotected industries.

Step by step solution

01

Concept

Some industries are considered not mature or stable enough to facefroeign competition. Such industries are protected from competition through barriers suchas tarriffs, quotas and subsidies.

02

Explanation

The imposition of barriers makes goods and services from these industries expensive. consumers pay high money to purchase goods due to which less money remains for purchasing goods from unprotected industries. This adversely affects the demand for products from unprotected industries. A decline in demand can cause workers to lose their jobs as production is reduced. In simple words, by purchasing goods from protected jobs the unprotected ones lose their jobs.

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