Using the model of the open economy studied in class answer the question: “Trade Tariffs imposed by the US on China will boost the US trade surplus” – True or False? (Explain carefully with theory – Diagrams required).

Using the model of the open economy studied in class answer the question: “Trade Tariffs imposed by the US on China will boost the US trade surplus” – True or False? (Explain carefully with theory – Diagrams required).

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 5CQQ

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4. Using the model of the open economy studied in class answer the question: “Trade Tariffs imposed by the US on China will boost the US trade surplus” – True or False? (Explain carefully with theory – Diagrams required).

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President Trump via twitter on 11/29/2018: “Billions of Dollars are pouring into the coffers of the U.S.A. because of the Tariffs being charged to China, and there is a long way to go. If companies don’t want to pay Tariffs, build in the U.S.A. Otherwise, lets just make our Country richer than ever before!” Comment on whether the terms-of-trade argument against free trade necessarily applies under the presence of retaliatory tariffs applied by trade partners; Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Z and S.A are trading partners. Both produce metal ores (including lithium) and delivery trucks. Now suppose that if Zimbabwe uses all of its resources, it can produce 50,000 tons of metal ores or 100,000 delivery trucks (trading off at a constant rate). Suppose that if South Africa uses all of its resources, it can produce 20,000 tons of metal ores or 80,000 delivery trucks (trading off at a constant rate). What is the direction of the trade (who exports what to whom)? Be sure to give the opportunity costs of production of both goods for both countries.