Identify which of the arguments for restricting trade that each of the following rebuttals directs against.RebuttalsThe Jobs ArgumentThe National-Security ArgumentThe Infant-Industry ArgumentThe Unfair-Competition ArgumentThe Protection-as-a-Bargaining-Chip Argument(A) The gains of the consumers from buying imports at the low price subsidized by foreign governments would exceed the losses of domestic producers. (B) Companies may exaggerate the degree to which their products are essential to national defense in order to obtain protection from foreign competition at the expense of consumers. (C) The country may be forced into deciding between implementing trade restrictions as threatened, which would make the society as a whole worse off, or backing down on its own threat, which would cause it to lose credibility in foreign affairs. (D) Opening up to free trade may impose hardship on some workers in the short run, but it also creates jobs in industries in which the country has a comparative advantage and enables the country as a whole to enjoy a higher standard of living.

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Answered: Identify which of the arguments for…

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 4PA

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Identify which of the arguments for restricting trade that each of the following rebuttals directs against.

Rebuttals	The Jobs Argument	The National-Security Argument	The Infant-Industry Argument	The Unfair-Competition Argument	The Protection-as-a-Bargaining-Chip Argument
(A) The gains of the consumers from buying imports at the low price subsidized by foreign governments would exceed the losses of domestic producers.
(B) Companies may exaggerate the degree to which their products are essential to national defense in order to obtain protection from foreign competition at the expense of consumers.
(C) The country may be forced into deciding between implementing trade restrictions as threatened, which would make the society as a whole worse off, or backing down on its own threat, which would cause it to lose credibility in foreign affairs.
(D) Opening up to free trade may impose hardship on some workers in the short run, but it also creates jobs in industries in which the country has a comparative advantage and enables the country as a whole to enjoy a higher standard of living.

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

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