International Economics
16th Edition
ISBN: 9781305887633
Author: Robert Carbaugh
Publisher: Cengage Learning
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Suppose a limited number of WTO member countries consider entering a customs union with zero tariffs within the union and common tariffs on imports from countries outside of the union. What will be the consequence for trade and welfare in the world? Explain two different effects of the new customs union using the gravity model.
Define trade liberalization.
examine different trade policy instruments and critically assess their impacts on national and firm level economic performance.
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- 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?arrow_forwardIn intentional trade negotiations, it is very common for a country's trade representative to threaten to enact protectionist policy that include: tariffs, quotas, quota-tariff, national security restrictions, and domestic content requirements. Define what each of these protection policies. Explain why quotas are usually the least creditable threat. If the trade represents a small importing country, would it make economic sense to threaten tariffs? Why or Why not?arrow_forwardTrade Protectionist tools include all of the following except: Select one: a. Open Borders for Goods, Capital and labor b. non-tariff barriers c. trade quotas d. tariffs e. capital controlsarrow_forward
- Why is tariff preferred to quota if protectionist policies are unavoidable.Critically evaluate.arrow_forwardDefine the term Trade agreement?arrow_forwardare policies other than tariffs that restrict international trade. A. Nontariff trade absolutions B. Nontariff trade barriers C. Nontariff trade exceptions D. Nontariff trade bundlesarrow_forward
- 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_forwardEvaluate the effectiveness of artificial trade barriers, such as tariffs and import quotas, as a way to achieve and maintain full employment throughout the U.S. economy. How might such policies reduce unemployment in one U.S. industry but increase it in another U.S. industry?arrow_forward
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