You are watching the nightly news. A political candidate being interviewed says, "I'm for free trade, but it must be fair trade. If our foreign competitors will not raise their environmental regulations, reduce subsidiaries to their export industries, and lower tariffs on their imports of our goods, we should retaliate with tariffs and import quotas on there goes to show them that we won't be played for fools!" A) If a foreign country artificially lowers the cost of production for its producers with lax environmental regulations and direct subsidiaries and then exports the products to us, who gains and who loses in our country, producers or consumers? B) Continuing form part A above, does our country gain or lose? Why? C) If a foreign country subsidizes the production of a good exported to the United States, who bears the burden of their mistaken policy? D) What happens to our overall economic well-being if we restrict trade with a country that subsidizes its export industries? Explain.
You are watching the nightly news. A political candidate being interviewed says, "I'm for free trade, but it must be fair trade. If our foreign competitors will not raise their environmental regulations, reduce subsidiaries to their export industries, and lower tariffs on their imports of our goods, we should retaliate with tariffs and import quotas on there goes to show them that we won't be played for fools!" A) If a foreign country artificially lowers the cost of production for its producers with lax environmental regulations and direct subsidiaries and then exports the products to us, who gains and who loses in our country, producers or consumers? B) Continuing form part A above, does our country gain or lose? Why? C) If a foreign country subsidizes the production of a good exported to the United States, who bears the burden of their mistaken policy? D) What happens to our overall economic well-being if we restrict trade with a country that subsidizes its export industries? Explain.
Chapter20: International Trade
Section: Chapter Questions
Problem 11QP
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Transcribed Image Text:You are watching the nightly news. A political candidate being interviewed says, "I'm for
free trade, but it must be fair trade. If our foreign competitors will not raise their
environmental regulations, reduce subsidiaries to their export industries, and lower
tariffs on their imports of our goods, we should retaliate with tariffs and import quotas on
there goes to show them that we won't be played for fools!"
A) If a foreign country artificially lowers the cost of production for its producers with
lax environmental regulations and direct subsidiaries and then exports the
products to us, who gains and who loses in our country, producers or
consumers?
B) Continuing form part A above, does our country gain or lose? Why?
C) If a foreign country subsidizes the production of a good exported to the United
States, who bears the burden of their mistaken policy?
D) What happens to our overall economic well-being if we restrict trade with a
country that subsidizes its export industries? Explain.
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