1.David Forsythe and Linda Novak are discussing the advantages and disadvantages of import restrictions. They state the following: Forsythe: One of the groups that benefits from import restrictions is often the government that imposes them. Novak: Import restrictions impose costs on specific groups, such as the country’s import industries, but these costs are more than offset by the benefits to other groups and to the economy as a whole. Are their statements correct?
A) Correct Correct B)
Incorrect Correct C) Incorrect Incorrect D) Correct Incorrect The correct answer was D) Forsythe is correct. A primary reason why trade restrictions remain widespread is the revenue that governments receive from tariffs. Novak is incorrect. Trade restrictions benefit specific groups, such as workers in the protected industries, but those benefits are less than the costs imposed on consumers and other industries as a whole. 2.Trade agreements like the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT) that lower trade barriers are least likely to: A) lead to economic growth. B) increase competition worldwide. C) lower trade barriers. D) cause a recession in the United States. The correct answer was D) The lowering of trade barriers is hoped to lead to economic growth opportunities and increased competition worldwide. 3.Which of the following reasons for a nation to adopt trade restrictions is the least valid? The: A) job protection argument. B) national defense argument. C) infant industry argument. D) anti-dumping argument. The correct answer was A) The number of jobs protected by import restrictions will be offset by jobs lost in the in the import/export industries. In the long run, trade restrictions cannot protect the net number of jobs in a country. 4.Prior to the beginning of the baseball season, the United States government places a tariff on imported bubble gum. Assume for this example that this tariff has a significant impact on the supply of bubble gum. Which of the following statements about the impact of this tariff is least valid? The tariff: A) will protect the jobs of domestic bubble gum industry workers. B) will prohibit foreign firms from dumping bubble gum on the U.S. market at below cost. C) is not necessary to maintain the high wages of the U.S. bubble gum industry workers. D) benefits the U.S. government and domestic producers. The correct answer was A) In the long run, trade restrictions do not protect the net number of jobs in the country. The number of jobs protected by import restrictions will be offset by jobs lost in the import/export industry. Import/export firms will be unable to sell the overpriced domestic products abroad or import and sell the lower priced restricted foreign-made product. The other statements are at least partially valid. Some reasons for trade restrictions that have some or partial validity are: national defense argument, infant industries argument, and anti-dumping argument. The assertion that trade with low-wage countries depresses wage rates in high-wage countries stems from a misunderstanding of comparative advantage. When each country produces goods for which it has a comparative advantage, both countries will benefit. High-wage countries likely have a comparative advantage in high tech manufacturing and low wage countries will have an advantage in labor-intensive goods. Tariffs benefit the U.S. government because it collects the tariff. Domestic producers benefit because the reduction in the supply of imported goods means a higher domestic price. | 
发表于 2008-4-16 17:56
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