Question

In: Economics

Please answer ALL the questions below! Circle the right expression in the parentheses. Q1. Free trade...

Please answer ALL the questions below!

Circle the right expression in the parentheses.

Q1. Free trade as against trade policy can be justified with several reasons. Various forms of trade policy (a. always / b. sometimes) generate welfare loss to the economy, so that free trade is (a. always/ b. usually/ c. sometimes) more efficient than under trade policy. Optimal tariff argument goes (a. along with/ b. against) free trade where the terms of trade (a. can/ b. cannot) dominate (a. welfare gain/ b. welfare loss) of import tariffs in a (a. large/ b. small) country. Also, (a. perfect/ b. imperfect) capital or labor market can justify protection of domestic producers when the welfare loss is (a. larger than / b. smaller than/ c. as large as) their social benefit. These market failures are (a. generally/ b. hardly) easy to identify.

Q2. Free trade usually benefits a (a. large/ b. small) number of consumers and hurt a (a. large/ b. small) number of import sector producers. While the producers’ gain due to trade policy is (a. collectively, b. individually) small but (a. collectively/ b. individually) large, the consumers’ cost is (a. collectively, b. individually) small but (a. collectively/ b. individually) large, so that consumers have (a. strong/ b. weak) incentive to create a political pressure group.

Q3. Domestic politics tends to (a. encourage/ b. discourage) free trade considering (a. economic efficiency/ b. income distribution), while international negotiation helps tariff reduction through giving domestic (a. exporters/ b. importers/ c. consumers) a direct stake and helps governments adopting (a. coordinated/ b. uncoordinated) trade policies.

Q4. Under GATT/WTO overall reductions in tariffs have been realized through (a. bilateral/ b. multilateral) negotiation. Recently, preferential trade agreements are negotiated among groups of countries, which are (a. out of/ b. within) the WTO rule, though (a. against/ b. in harmony with) the non-discrimination principle. These agreements have (a. always/ b. sometimes) ambiguous effects on economic welfare. If they replace domestic production by low cost import goods from other member economies, the country will (a. benefit/ b. lose), but, if it replaces imports from non-member economies with high cost imports from other members, the country will (a. benefit/ b. lose).

Solutions

Expert Solution

Free trade as against trade policy can be justified with several reasons.

Q1. Various forms of trade policy (always) generate welfare loss to the economy, so that free trade is (usually) more efficient than under trade policy. Optimal tariff argument goes (against) free trade where the terms of trade (can) dominate (welfare gain) of import tariffs in a (large) country. Also, (imperfect) capital or labor market can justify protection of domestic producers when the welfare loss is (larger than) their social benefit. These market failures are (generally) easy to identify.

Q2. Free trade usually benefits a (large) number of consumers and hurt a (small) number of import sector producers. While the producers’ gain due to trade policy is (individually) small but (collectively) large, the consumers’ cost is (individually) small but (collectively) large, so that consumers have (strong) incentive to create a political pressure group.

Q3. Domestic politics tends to (discourage) free trade considering (economic efficiency), while international negotiation helps tariff reduction through giving domestic (exporters) a direct stake and helps governments adopting (coordinated) trade policies.

Q4. Under GATT/WTO overall reductions in tariffs have been realized through (multilateral) negotiation. Recently, preferential trade agreements are negotiated among groups of countries, which are (within) the WTO rule, though (in harmony with) the non-discrimination principle. These agreements have (sometimes) ambiguous effects on economic welfare. If they replace domestic production by low cost import goods from other member economies, the country will (benefit), but, if it replaces imports from non-member economies with high cost imports from other members, the country will (lose).


Related Solutions

Answer ALL of the questions below! Circle the right expression in the parentheses. Q1. Import tariff...
Answer ALL of the questions below! Circle the right expression in the parentheses. Q1. Import tariff (a. raises, b. lowers, c, keeps constant) the domestic price and (a. always, b. sometimes, c. never) (a. raises, b lowers) the world price. 2. (Multiple choices.) A tariff in a large country tends to benefit (a. domestic producers/ b. foreign producers/ c. domestic consumers/ d. foreign consumers/ e. domestic government revenue) and hurt (a. domestic producers/ b. foreign producers/ c. domestic consumers/ d....
I need an answer to all three questions, please. Q1: Which of the following was not...
I need an answer to all three questions, please. Q1: Which of the following was not a policy response to the Economic crisis associated with the COVID-19 Crisis? Select one: a. The Fed lowered the policy rate by roughly 1.5 percentage points to nearly zero. b. The U.S. Congress passed a roughly $3 Trillion economic stimulus package. c. The Commonwealth of Massachusetts relaxed the balanced budget rule in the State Constitution. d. The Fed introduced facilities to keep markets liquid...
Please answer all the questions. Thank you Use the following data to answer the questions below:...
Please answer all the questions. Thank you Use the following data to answer the questions below: Column 1 Column 2 Column 3 Y in $ C in $ 0 500 500 850 1,000 1,200 1,500 1,550 2,000 1,900 2,500 2,250 3,000 2,600 What is mpc and mps? Compute mpc and mps. Assume investment equals $ 100, government spending equals $ 75, exports equal $ 50 and imports equal $ 35. Compute the aggregate expenditure in column 3. Draw a graph...
Please answer the below questions ( I need answers for all the below questions). Thank you...
Please answer the below questions ( I need answers for all the below questions). Thank you True or False Write true if the statement is true or false if the statement is false. _______ The heart consists mainly of muscle. _______ Blood pressure is highest in veins. _______ Atherosclerosis is the buildup of plaque inside arteries. _______ Platelets are blood cells that fight infections. _______ Peripheral gas exchange takes place in the lungs. _______ Food travels from the mouth to...
1. In this question, circle the best answer within the parentheses. FR = functional response. a....
1. In this question, circle the best answer within the parentheses. FR = functional response. a. Compare search time: FR 1(> / = / <) FR 3. b. Compare handling time: FR 1 (> / = / <) FR 2. c. Which portion of the type 2 functional response isinfluenced by search time (low prey density/ high prey density), and handling time (low prey density / high prey density)? 2. One mechanism suggested to maintain biodiversity is that a species...
Please answer 3 (or all) of the 5 questions below the background information: THIS IS ALL...
Please answer 3 (or all) of the 5 questions below the background information: THIS IS ALL THE INFORMATION AVAILABLE Background: Some years back policy makers in the Kingdom of Bahrain were faced with rising inflation caused by the fall in the value of the US dollar relative to other currencies. The Kingdom’s currency unit, the Bahraini dinar (BD), is pegged to the dollar, so when the dollar goes down in value the BD goes down as well. A weaker dollar/dinar...
Please answer all questions: Explain using relative examples: a. Trade Creation b. Trade Diversion
Please answer all questions: Explain using relative examples: a. Trade Creation b. Trade Diversion
answer all these questions please with the right question number next to its letter 12-The mean...
answer all these questions please with the right question number next to its letter 12-The mean gross annual incomes of certified welders are normally distributed with the mean of $20,000 and a standard deviation of $2,000. The ship building association wishes to find out whether their welders earn more or less than $20,000 annually. The alternate hypothesis is that the mean is not $20,000. If the level of significance is 0.10, what is the decision rule? A Reject the null...
Please answer all questions in Macroeconomics below, and answer them in detail and precisely. Question 5...
Please answer all questions in Macroeconomics below, and answer them in detail and precisely. Question 5 (Word limit 500 words) The world economy, in the last few months, has started to slow down due to many factors, such as trade wars, uncertainty over Brexit, and general slowdown in other economic activity. Assuming an economy starts initially at the full employment equilibrium, discuss (with the aid of aggregate output market and money market diagrams) the short run effect of a decrease...
Please answer all questions Select from among the statements below any or all that are true....
Please answer all questions Select from among the statements below any or all that are true. A. An employee handbook can never serve as the basis for a claim by an employee against an employer. B. If an employee handbook states that it is not a contract, the employer is free to pick which provisions are enforceable. C. An employee handbook can never serve as the basis for a claim by an employer against an employee. D. If an employee...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT