ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 3, Problem 4.13P
To determine
The reasons for occurrence of international trade and the meaning of a deficit in the merchandise trade balance.
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Why does international trade occur? What does it mean to run a deficit in the merchandise trade balance?
Why do countries restrict trade
Why do countries often protect their economies from imports?
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- From the Work It Out Effects of Trade Barriers, you can see that a tariff raises the price of imports. What is interesting is that the price rises by less than the amount of the tariff. Who pays the rest of the tariff amount? Can you show this graphically?arrow_forwardDescribe 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_forwardFirms hurt by lower priced imports typically argue that restricting trade will save U.S. jobs. What’s wrong with this argument? Are there ever any reasons to support such trade restrictions?arrow_forward
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