Chapter 20: Q. 26 (page 490)
Is international trade likely to have about the same effect on everyone’s wages?
Short Answer
No.
Chapter 20: Q. 26 (page 490)
Is international trade likely to have about the same effect on everyone’s wages?
No.
All the tools & learning materials you need for study success - in one app.
Get started for freeDoes international trade, taken as a whole, increase the total number of jobs, decrease the total number of jobs, or leave the total number of jobs about the same?
Trade has income distribution effects. For example,
suppose that because of a government-negotiated
reduction in trade barriers, trade between Germany and the Czech Republic increases. Germany sells house paint to the Czech Republic. The Czech Republic sells alarm clocks to Germany. Would you expect this pattern of trade to increase or decrease jobs and wages in the paint industry in Germany? The alarm clock industry in Germany? The paint industry in Czech Republic? The
alarm clock industry in Czech Republic? What has to happen for there to be no increase in total unemployment in both countries?
What are the gains from competition?
What are main reasons for protecting “infant industries”? Why is it difficult to stop protecting them?
How does competition, whether domestic or foreign, harm businesses?
What do you think about this solution?
We value your feedback to improve our textbook solutions.