MACROECONOMICS-W/MINDTAP
15th Edition
ISBN: 9781305361409
Author: Gwartney
Publisher: CENGAGE L
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Question
Chapter 18, Problem 15CQ
To determine
The impact of increase in the trade with low wage countries.
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What are the government’s effects on trade ? Why ? Explain them briefly.
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Politicians view trade agreements as a series
of exchanges. Which interests are politicians
forgetting when conducting their trade
policy? Explain why. How could these
interests be better represented?
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- The book states “The pain caused by the movement toward a free trade regime is a short-term phenomenon, while the gains from trade once the transition has been made are both significant and enduring”. Unions in developed nations often oppose imports from low-wage countries because of the negative impacts that occur to the workers. I personally do not believe that such competition is unfair. The union’s argument is in the best interest of the people they represent, and not the country as a whole. If imports are stopped from low-waged countries, it would force developed countries to use and produce local goods and jobs. With more jobs and the use of more local goods, this gives an advantage to the union workers, but leaves our country at a disadvantage. Some disadvantages include the price of goods increasing, other countries not wanting to work with us, we will lose out on products that we can’t make, and it’s ultimately not in the best interest for economic growth in the long run.…arrow_forwardAmerican firms outsource many jobs to other, lower cost countries. How can this outsourcing actually lead to increased employment here in the USA? How can there be any economic gains for a country from both importing and exporting the same good, like cars?arrow_forwardDefine trade liberalization.arrow_forward
- How important is international trade to the United States? Are other countries more or less dependent on trade with the United States? In your opinion, what country is the most important trading partner with the United States?arrow_forwardSome economists say the cost of international trade is the loss of American jobs. Do you think this is true? Explain.arrow_forward"Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade." How would I respond to this statement?arrow_forward
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