Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 21: Q 4. (page 521)

Explain how trade barriers raise wages in protected industries by reducing average wages economy-wide.

Short Answer

Expert verified

Because of trade barriers, there are various effects on industries and the economy.

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

A trade that happens on the basis of comparative advantage increases the average rate of wages in the economy and also decreases the income of import industries. And if a country is not trading on a comparative advantage basis the opposite will happen as the average wages decrease in the economy, while the workers in the protected industries would have an advantage.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

How does the cost of “saving” jobs in protected industries compare to the workers’ wages and salaries?

How does international trade affect the working conditions of low-income countries?

An economic union requires giving up some

political autonomy to succeed. What are some examples of political power countries must give up to be members of an economic union?

Why do low-income countries like Brazil, Egypt, or Vietnam have lower environmental standards than high-income countries like the Germany, Japan, or the United States?

You have just been put in charge of trade policy for Malawi. Coffee is a recent crop that is growing well and the Malawian export market is developing. As such, Malawi coffee is an infant industry. Malawi coffee producers come to you and ask for tariff protection from cheap Tanzanian coffee. What sorts of policies will you enact? Explain.
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free