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Chapter 21: Q 3. (page 521)

Explain how trade barriers save jobs in protected industries, but only by costing jobs in other industries.

Short Answer

Expert verified

Because trade barriers affect other industries.

Step by step solution

01

Step 1. Definition

Trade barriers are defined as the protectionist form of trade that is put by the governments to have a limited trade between various nations and economies.

02

Step 2. Explanation

This happens because trade barriers increase the price of goods in sheltered industries. And maybe those products are used as inputs in other industries this increase their production costs and then their prices will also increase and in turn, their sales decrease due to increased prices. When sales have decreased employment also declines because now they produce less because of less demand.

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