Homework Help Question & Answers

Unfair Trade A global recession has hit and you are the economic advisor to a country...


Unfair Trade A global recession has hit and you are the economic advisor to a country with a struggling economy and rising un
Unfair Trade A global recession has hit and you are the economic advisor to a country with a struggling economy and rising unemployment. Your country has a long history of trading with different nations, but due to the recession, labor and business groups are becoming ever more rabid in their pleas for the government to strengthen and enforce trade restrictions. The labor groups argue that too many businesses are trying to cut costs by replacing domestic workers with cheaper foreign labor. At the same time, businesses are claiming that they are losing consumers due to foreign products flooding the markets. What do you do? a. Using what you know about supply and demand, what would happen to the equilibrium price and quantity of any good if you shut the borders to all foreign products? b. What would happen to the cost of production for businesses if you required them to only hire domestic workers and only use domestic capital? What would happen to the prices consumers faced? c. What would happen to the demand for your country's exports in the rest of the world if you refused to buy any other country's exports? d. Based on your answers to a, b, and c, what is the effect of trade restrictions on the economy? What do you tell the interest groups?
0 0
Next > < Previous
ReportAnswer #1

a) If there is cheaper foreign workers and the expensive domestic workers, with the shutting down of the cross borders it would help to restrict the foreign workers coming and getting more jobs in the domestic industry. The forms would either curtail the production or hire the domestic workers who are expensive and high cost. With the more jobs, it would help in earning more and there would be high production and consumption leading to a higher multiplier effect on the economy

b) The prices would surge, as the domestic workers and the capital is expensive. It would lead to higher cost items and products would be sold. But as the domestic workers are getting wages and earning, they would also spend and it would increase the more multiple effects of the economy.

c) If we refused to buy any other country’s exports, the other foreign countries would also restrict their purchase of exports or if the product is a necessary item which is available in a limited capacity, the foreign country has to purchase it. It would lead to more foreign exchange earnings and currency.

d) Trade restrictions within the economy can lead to the pro-producer and anti-consumer effects along with causing the barriers to the businesses, consumers and subsequently facing the government consequences and shifts. While in the short run the economy would experience higher-priced goods and services but at the same time would reduce the consumption of the individual consumers along with the businesses. The problem of the trade barriers is experiencing the tariffs, based on the economic harm than benefit; which would lead to higher prices and would affect the and reduced employment, along with the lower economic output.

Know the answer?
Add Answer of:
Unfair Trade A global recession has hit and you are the economic advisor to a country...
Your Answer: Your Name: What's your source?
Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Using what you know about supply and demand, what would happen to the equilibrium price and...

    Using what you know about supply and demand, what would happen to the equilibrium price and quantity of any domestic goods if you shut the borders to all foreign products? What would happen to the cost of production for businesses if you required them to only hire domestic workers and only use domestic capital? What would happen to the prices consumers faced? What would happen to the demand for your country’s exports in the rest of the world if you...

  • The U.S. government restricting the quantity of sugar imports into the country is an example of...

    The U.S. government restricting the quantity of sugar imports into the country is an example of a(n): trade settlement. trade quota. market hanger. embargo. The key industries argument for trade restrictions relies on the notion that: war may disrupt trade flows. some industries deserve protection because they provide positive spillover effects to the rest of the economy. products with inelastic supply are the major source for job creation. economies of scale are easier to achieve in exporting industries. Which of...

  • 15. Suppose that ED 0.75 and e 0.5 for a given country: Are import demands elastic or inelastic i...

    15. Suppose that ED 0.75 and e 0.5 for a given country: Are import demands elastic or inelastic in this case? Does the Marshall-Lerner condition hold? How do you know? Suppose that domestic price of this country's imports rise by 10% following a devaluation. What will happen to the quantity that it imports? Suppose that the foreign currency price of this country's exports falls by 10 percent following a devaluation. What will happen to the quantity of exports? a. b....

  • 3. Which two sentences work together to express the topic of Paragraph 27 4. What is...

    3. Which two sentences work together to express the topic of Paragraph 27 4. What is the main idea of Paragraph 3? a. Citizens would benefit significantly from purchasing goods made in their country. b. It is advantageous for workers to adapt swiftly to dynamic economic conditions. c. Workers should change their circumstances as soon as the economy is hit with problems. d. Protectionist policies serve to help workers in certain industries keep their jobs. 5. What is the main...

  • The demand and supply for automoblles In a certain country is given In the graph below....

    The demand and supply for automoblles In a certain country is given In the graph below. The world price of automobles is $8,000. a. Assuming that the economy Is closed, find the equilibrium price and quantity of automobles. Instructions: Indicate the equilibrium price and quantity using the tool "Equilibrium* by clicking on the appropriate Intercept on the given graph. Market for Cars Price of cars (S) 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Tools...

  • Complete the following questions: use specific examples to support your answers. If exports increase and imports...

    Complete the following questions: use specific examples to support your answers. If exports increase and imports decrease in the U.S., what happens to the trade deficit? Will this help or hurt the U.S.? In what ways is a bigger trade deficit a problem for the country? What good is the deficit? Hint: Use the currency market supply and demand to determine the exchange rate. In what ways is the trade between countries increasing? Is trade good or bad for U.S.?...

  • Use the model of the small open economy to predict what would happen to the trade balance, real exchange rate, and nominal exchange rate to each of the following events:a

    Use the model of the small open economy to predict what would happen to the trade balance, real exchange rate, and nominal exchange rate to each of the following events:a. A fall in consumer confidence about the future induces consumers to spend less and save more.b. The introduction of a stylish line of Toyotas make some consumers prefer foreign cars then domestic cars.c. The introduction of automatic teller machines reduces the demand of money

  • (1) If the world price is above the domestic equilibrium price, the domestic country is likely...

    (1) If the world price is above the domestic equilibrium price, the domestic country is likely to ____________________ the good.          (2) The difference between what an economy sells to and buys from foreigners is _________________.          (3) The idea that exchange rates and prices adjust to equalize the cost of living across international boundaries is called __________________________.          (4) In the graph below, when the world price is $3, how many units are...

  • The trade dispute between China and the US has left some fearing a global slowdown and...

    The trade dispute between China and the US has left some fearing a global slowdown and perhaps a world-wide recession. If the latter occurs, the Canadian economy will certainly experience a recession. What would you expect to happen to Canadian real national income and its growth rate over the next few quarters? What is likely to happen to the output gap? the unemployment rate? Briefly explain.

  • 2. Variation NL For Country A the dennand and supply for food are given by Qda-520-200P and Qsa =-80 + 100P. respectively. Analogously, Qdb-900-300P and Qsb-600P are the curves for Country B. Usi...

    2. Variation NL For Country A the dennand and supply for food are given by Qda-520-200P and Qsa =-80 + 100P. respectively. Analogously, Qdb-900-300P and Qsb-600P are the curves for Country B. Using this information answer the following questions, keeping you answers as precise as possible either by working with fractions or using about 5 decimal places. (a) Find domestic equilibria (prices and quantities) before international trade starts. (b) Next, find international trade equilibrium: the international price and the quantity...

Free Homework App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.