why should U.S. trade with other countries: 1) the conclusions of the Ricardian and H-O models...

why should U.S. trade with other countries: 1) the conclusions of the Ricardian and H-O models to argue why the U.S. should trade with other countries, even when some sectors (import-competing industries) might be hurt by free trade; (2) Will more protectionism benefit or hurt this country? Why? (3) People often cite job losses as a potential problem with free trade. Is this a valid argument against free trade? Why or why not?

Expert Solution

1.

The USA should trade with other countries, even if some sectors might be hurted, because gains from the trade is much bigger than the losses from the sufferings caused to some sectors. Besides, the import of goods to the USA forces the domestic players to become efficient, competitive and deliver quality products. It makes consumers to be the ultimate winner. So, USA should trade and domestic sectors should improve to compete in the international market.

2.

Protectionism will hurt this country, because firms in the protected sectors, will remain inefficient and put high prices on goods. It will make consumers to pay more and spend more on these goods of protected sectors. As a result, demand for other sectoral goods suffers and unemployment grows in those sectors where protection is not given. So, the economy suffers due to the protectionism.

3.

It is not a valid argument, because it is the protectionism that creates redistribution of income and job loss takes place in those sectors that are not protected due to lower demand for goods of those sectors. when free trade happens, then investments take place and new jobs are created. Further, firms reach out to new markets and they require people. So, jobs are created due to free trade and people should take advantage of it.

Rahul Sunny answered 1 year ago

Ricardian Model with Technological Progress: Consider the Ricardian model of trade. Two countries, Paraguay and Uruguay,...

Ricardian Model with Technological Progress: Consider the Ricardian model of trade. Two countries, Paraguay and Uruguay, produce two goods, Beef (B) and Soybeans (S), using only labor. Paraguay can produce one tonne of Beef with 3 units of labor and one tonne of Soybeans with 3 units of labor. Uruguay can produce one tonne of Beef with 2 units of labor and one tonne of Soybeans with 3 units of labor. Both countries are endowed with a labor force of...

Why do most countries impose restrictions on trade with other countries? If the theory states that...

Why do most countries impose restrictions on trade with other countries? If the theory states that free-trade across borders generally leads to lower prices and increased benefits for consumers and producers, why don’t governments just leave trade alone?

What is the Ricardian model and H-O theory? Explain the differences of above with case studies...

What is the Ricardian model and H-O theory? Explain the differences of above with case studies explaining international trade patterns among two countries. 300 Words.

Should the U.S. prioritize lowering the trade deficit? Why or why not? BE AS DETAIL AS...

Should the U.S. prioritize lowering the trade deficit? Why or why not? BE AS DETAIL AS POSSIBLE

Why do countries trade with each other? What would happen if countries curtailed or did not...

Why do countries trade with each other? What would happen if countries curtailed or did not trade with each other? Select a theory discussed in chapter 2, explaining why it is beneficial for a country to engage in international trade.

Short Answer Questions 1.Which one of the three basic international trade models (i.e., the Ricardian Model,...

Short Answer Questions 1.Which one of the three basic international trade models (i.e., the Ricardian Model, the Specific-Facotor Model, and the H-O model) do you like most, why? (Please explain with real world cases or relevant theories) 2.Talk about your gains and thoughts during and after studying international trade.

how does the productivity of the U.S realte to other countries? why is our productivity at...

how does the productivity of the U.S realte to other countries? why is our productivity at the persistent levels compared to other countries? how does the u.s productivity affect you personally?

TQ02 - Ricardian model 1. In the simple Ricardian model international trade is based on comparative...

TQ02 - Ricardian model 1. In the simple Ricardian model international trade is based on comparative advantage. What is the explanation for this? What benefits does international trade have given that it is based on comparative advantage? 2. We know that in a country the relative price of a product have increased as a result of international trade. Does this country export or import this product? Explain your answer! TQ05 - Trade policy 1. If a country imposes a tariff...

.Briefly explain why, according to the H-O model, international trade in goods between Europe and Africa...

.Briefly explain why, according to the H-O model, international trade in goods between Europe and Africa would lead to the equalization of factor prices in both Europe and Africa. (25 points)

Consider a Ricardian world consisting of U.S. and Japan. Both countries produce and consume the same...

Consider a Ricardian world consisting of U.S. and Japan. Both countries produce and consume the same two goods: cars and computers. In U.S., it takes 400 hours of labor to make a car, and 100 hours of labor to make a computer. In Japan, it takes 400 hours of labor to make a car, and 200 hours of labor to make a computer. Each country has 2 billion hours of labor. a. What would the autarky equilibrium (i.e., the...

Question