Chapter 20: Problem 33
What is the general trend of trade barriers over recent decades: higher, lower, or about the same?
Chapter 20: Problem 33
What is the general trend of trade barriers over recent decades: higher, lower, or about the same?
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Get started for freeTrade 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?
Economists sometimes say that protectionism is the “second-best” choice for dealing with any particular problem. What they mean is that there is often a policy choice that is more direct or effective for dealing with the problem—a choice that would still allow the benefits of trade to occur. Explain why protectionism is a “second-best” choice for: a. helping workers as a group b. helping industries stay strong c. protecting the environment d. advancing national defense
What is dumping? Why does prohibiting it often work better in theory than in practice?
If opening up to free trade would benefit a nation, then why do nations not just eliminate their trade barriers, and not bother with international trade negotiations?
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