BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

Solutions

Chapter
Section
BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985
Textbook Problem

An economist discussing trade policy in The New Republic wrote: “One of the benefits of the United States removing its trade restrictions [is] the gain to U.S. industries that produce goods for export. Export industries would find it easier to sell their goods abroad—even if other countries didn’t follow our example and reduce their trade barriers.” Explain in words why U.S. export industries would benefit from a reduction in restrictions on imports to the United States.

To determine

The impact of reduction in the trade barriers.

Explanation

The trade barriers are obstacles which disturbs the free flow of trade between the countries. The barriers of trade can be both monetary and non-monetary. The tariff is an example of monetary form which imposes a payment similar to tax on the imports. The quota is another trade barrier and it is a non-monetary barrier.

When there are trade restrictions, the free flow of goods and services between the nations will be disturbed. As a result, the quantity of exports and imports will be restricted. Therefore, the trade barriers will result in the reduction of net exports at any given real exchange rate of the economy. When the net exports decrease, the demand for the US dollars in the foreign currency exchange market will also decrease resulting in a leftward shift in the demand curve for dollar...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

ADDITIONAL FUNDS NEEDED Morrissey Technologies Inc.s 2014 financial statements are shown here. Morrissey Techno...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Why is actual costing rarely used for product costing?

Cornerstones of Cost Management (Cornerstones Series)