When a trade restriction is imposed on an imported good: a. the nation imposing the trade restriction suffers a net economic loss b. a loss is imposed on foreign producers c. Both of the above d. Neither of the above

When a trade restriction is imposed on an imported good: a. the nation imposing the trade restriction suffers a net economic loss b. a loss is imposed on foreign producers c. Both of the above d. Neither of the above

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter28: International Trade

Section: Chapter Questions

Problem 11P

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Question

When a trade restriction is imposed on an imported good:

a. the nation imposing the trade restriction suffers a net economic loss

b. a loss is imposed on foreign producers

c. Both of the above

d. Neither of the above

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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?
Describe a scenario in which a trade surplus benefits an economy and one in which a trade surplus is economy in an economy that performs poorly. What key factor or factors are making the difference in the outcome that results from a trade surplus?
How do trade barriers affect the average Income level in an economy?
If trade barriers hurt the average worker in an economy (due to lower wages), why does government create trade barriers?
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?