With each type of trade barrier, who is affected? How does each policy affect prices and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
With each type of trade barrier, who is affected? How does each policy affect prices and jobs? BARRIERS TO TRADE Definitions: Barriers to Trade: Policies that restrict the free flow of goods and services between countries; types commonly used are tariffs, quotas, export subsidies, and standards. Tariff: Tax on imported goods or services; a tariff may be used to raise revenues for the government imposing the tariff, but is more commonly used to reduce consumption by domestic consumers of the imported good or service. A tariff increases the price of an imported good, thus making the good less attractive to consumers than a less expensive domestic good. Quota: Limit on the amount of an imported good allowed into the country during a given period of time (i.e., one year); a quota reduces not only the amount of imported goods available but also the total amount of that good available; when supply is decreased, price increases for the consumer; thus, a quota, like a tariff, raises the prices of the good for consumers. Export Subsidy: Government financial assistance to a firm that allows a firm to sell its product at a reduced price; this makes the product more competitive when exported to other countries. Consumers (both at home and abroad) benefit from lower prices but the subsidy is paid for by taxpayers in the country providing the subsidy. Product Standards: A type of "hidden" trade barrier; most countries set their own standards for product safety, content, packaging, etc.; if a standard for a product differs in Country A from the standards of Country B, firms in Country B will spend additional money in production to meet the standards of Country A if they want to export their product there, this addition to the cost of production will make their product more expensive for consumers in Country A to buy and will encourage consumers there to buy domestic (Country A) products instead. Consumers in Country A will pay higher prices for these goods than they would without a trade barrier. With each type of trade barrier, who is affected? How does each policy affect prices and jobs? BARRIERS TO TRADE Definitions: Barriers to Trade: Policies that restrict the free flow of goods and services between countries; types commonly used are tariffs, quotas, export subsidies, and standards. Tariff: Tax on imported goods or services; a tariff may be used to raise revenues for the government imposing the tariff, but is more commonly used to reduce consumption by domestic consumers of the imported good or service. A tariff increases the price of an imported good, thus making the good less attractive to consumers than a less expensive domestic good. Quota: Limit on the amount of an imported good allowed into the country during a given period of time (i.e., one year); a quota reduces not only the amount of imported goods available but also the total amount of that good available; when supply is decreased, price increases for the consumer; thus, a quota, like a tariff, raises the prices of the good for consumers. Export Subsidy: Government financial assistance to a firm that allows a firm to sell its product at a reduced price; this makes the product more competitive when exported to other countries. Consumers (both at home and abroad) benefit from lower prices but the subsidy is paid for by taxpayers in the country providing the subsidy. Product Standards: A type of "hidden" trade barrier; most countries set their own standards for product safety, content, packaging, etc.; if a standard for a product differs in Country A from the standards of Country B, firms in Country B will spend additional money in production to meet the standards of Country A if they want to export their product there, this addition to the cost of production will make their product more expensive for consumers in Country A to buy and will encourage consumers there to buy domestic (Country A) products instead. Consumers in Country A will pay higher prices for these goods than they would without a trade barrier.
Expert Answer:
Answer rating: 100% (QA)
1 Tariffs Affected Parties Importers and consumers in the country imposing the tariff are affected Domestic producers may benefit from reduced foreign ... View the full answer
Related Book For
Auditing and Assurance Services A Systematic Approach
ISBN: 978-0077732509
10th edition
Authors: William Messier Jr, Steven Glover, Douglas Prawitt
Posted Date:
Students also viewed these economics questions
-
MCQ questions: 1. An increase in oil prices, such as the oil shocks in the 70s, lead to _______ thereby causing ________ a movement along the AS curve; cost-push inflation a leftward shift in the AS...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
make a stored procedure called projects_at_this_location that receives a location and returns the projects (if any) at that location as shown in the following sample run: (2 points) exec...
-
Presented below are five independent situations. All the companies involved use ASPE unless otherwise noted. 1. On December 31, 2017, Zarle Inc. sold equipment to Orfanakos Corp. and immediately...
-
Find the frequency-domain impedance, Z, shown infigure. ww 20 j2n j2n j4 0
-
The adjusted trial balance of Brompton Bowling Alley at 30 June 2026, the end of the entitys accounting year, follows. Additional data taken into account in the preparation of the above adjusted...
-
What is the nature of Lenovo's international strategy? Is the firm's strategy primarily multidomestic or global? Justify your answer. What advantages does Lenovo derive from the particular...
-
Recording Amortization with a Change in Accounting Estimate On January 1 of Year 1, Kelley Company purchased a new patent for $22,440 and started amortizing it over its legal life of 20 years. At the...
-
Conroy Company manufactures two products-B100 and A200. The company provided the following information with respect to these products: B100 A200 Estimated customer demand (in units) Selling price per...
-
Use power series to solve the differential equation xy" + 6xy + y = 0, y(x) =??
-
Explain how what you have learned from these readings will impact how you affect positive social change in a leadership role by including a summary of how you envision using your own passion to live...
-
There are two middle schools in a county. The first middle school had 2 0 % more children than the sec ond middle school. Then 1 0 % of the children at the second middle school left the county. What...
-
Consider a reaction involving oxygen (O), hydrogen (H), and water (H2O) molecules O+2H H2O taking place in a volume V and in thermal equilibrium at temperature T. Consider that the hydrogen density...
-
As a final part of this assessment task, you are to share your ideas on the challenges and barriers there are to supporting diverse work teams, as well as your ideas on how these can be overcome to...
-
Pacific Cruises provides standard riverboat cruises for tourists on the Hawkesbury River. The average cruise has 90 passengers on board. Each passenger pays $100 for a days cruising. The riverboat...
-
A company can produce a part it uses in an assembly operation at the rate of 25 an hour. The company operates eight hours a day, 300 days a year. Daily usage of the part is 150 parts. The company...
-
Wholesalers Ltd. deals in the sale of foodstuffs to retailers. Owing to economic depression, the firm intends to relax its credit policy to boost productivity and sales. The firms current credit...
-
Brown, CPA, is auditing the financial statements of Big Z Wholesaling, Inc., a continuing audit client, for the year ended January 31, 2015. On January 5, 2015, Brown observed the tagging and...
-
For each of the following items, assume that Josh Feldstein, CPA, is expressing an opinion on Scornick Company's financial statements for the year ended December 31, 2015; that he completed fieldwork...
-
On January 15, 2015, Leno, Inc., which has a March 31 year-end, entered into a transaction to sell the land and building that contained its manufacturing operations for a total selling price of...
-
While designing a conveyor belt system for a new airport, you determine that, when a typical suitcase is moving up an incline of \(20^{\circ}\), the magnitude of the maximum forward acceleration a...
-
In the diagrams in Figure 10. 22, the velocity of an object is given along with the vector representing a force exerted on the object. For each case, determine whether the object's speed increases,...
-
Draw the sum \(\vec{A}+\vec{B}\) and the difference \(\vec{A}-\vec{B}\) of each vector pair in Figure 10. 23 . Data from Figure 10 . 23 88 (a) (9) L 189 (c) 109 F V 100 B (P)
Study smarter with the SolutionInn App