Question

Assuming you are the economic adviser of a government, whose president is convinced that increasing the...

Assuming you are the economic adviser of a government, whose president is convinced that increasing the tariffs, then the terms of trade will be affected causing the country’s economy to enjoy more well-being. Keep in mind we are talking about a small country. Does this proposal make sense in theoretical terms? Explain why it does or does not using the theory.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer) The imposition of a tariff could be used to safeguard domestic industries. This move would definitely enhance the level of producer surplus in the market. But the consumer is likely to suffer to due to higher price.

From the point of view of international trade, the imposition of tariff would improve the terms of trade of Nation in the short run only. As the nation is a small Nation and it cannot dictate the level of world prices. The benefits enjoyed by the nation would exist only for a very short duration.

If the tariff prevails perpetually then the nation could lose on the trade share. As it would ultimately reduce to a no trading situation for the small economy.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1.) If you were the economic adviser to the president and the government’s goal is to...
1.) If you were the economic adviser to the president and the government’s goal is to stimulate the economy by increasing GDP by $2,400 billion, which one will you recommend to achieved this GDP target? Government spending or tax cut? Why?
In a free market economy: a. government has no economic role b. government ensures that resources...
In a free market economy: a. government has no economic role b. government ensures that resources are used efficiently c. less new ideas will be generated than in a centrally planned economy d. bad ideas will quickly be abandoned because of the competitive process In order for a nation to trade according to comparative advantage: a. governments must subsidize domestic companies b. its government must direct producers to their comparative advantage c. its government must restrict imports in order to...
Can I have your opinion on this research and possible correction? The global economy and government’s...
Can I have your opinion on this research and possible correction? The global economy and government’s ability to control its country’s currency. Definition of terms Global economy is an economic interdependence established between the most influential countries that drives the worldwide economic environment. It is also the aggregate economic output, movement and influence of all countries. (My Accounting course). Currency is the medium of exchange for goods and services. In short, its money, in the form of paper or coins,...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind of your average Argentine, who remembers the tough times and hyperinflation of the 1980s, the events of 2001 and 2002 have brought fiscal policy back to the forefront of public concern. Though the early 1990s may have been characterized by financial optimism, Argentina has been in a recession since Brazil's 1998 monetary crisis sent shockwaves across the regional and global markets. In early 2002,...
This article illustrates the political economy of international trade and the concept of comparative advantage. Explain...
This article illustrates the political economy of international trade and the concept of comparative advantage. Explain the nations who are the "Winners" and "Losers" (5 points) and why as described in this article, and the effect of "arbitrary government intervention" that circumvents the workings of free trade initiated by Senator Trent Lott as described in the article? Use the economic concept of comparative advantage in your explanation (5 points). Due Jan 15 As a side note - why do a...
What happened on Lebanon economics? Read this Articals and share with us your opinion and solution....
What happened on Lebanon economics? Read this Articals and share with us your opinion and solution. A Lebanese anti-government protester holds a placard as she sits for a haircut in front of the central bank headquarters in Beirut to protest against the economic policies of the bank. (AFP) A gathering of Lebanese anti-government protesters getting haircuts in front of the central bank building in Beirut last week attracted many jokes and much amusement. The protesters were expressing their rejection of...
1. In which phase of the business cycle is the U.S. economy currently in? ________________. How...
1. In which phase of the business cycle is the U.S. economy currently in? ________________. How many months has the U.S. economy been in this stage of the business cycle? ___________ months 2. How long has the current expansion/recovery lasted to date? _________________ How does this compare to the average length of U.S. recessions since 1854? ______________________________. 3. What do the last four recoveries/expansions (that is, the current recovery/expansion and the previous three recovery/expansions), suggest about a new trend in...
Whatever It Takes: How the Fed Aims to Rescue the Economy The central bank is using...
Whatever It Takes: How the Fed Aims to Rescue the Economy The central bank is using tactics from the last financial crisis and deploying new ones to keep money flowing. Here are the basics. The Federal Reserve, under Jerome H. Powell, is moving to shore up the American economy during the coronavirus pandemic. Credit...Yuri Gripas/Reuters By Ben Casselman March 23, 2020 The Federal Reserve on Monday pledged to do, in essence, whatever it takes to keep the economy from collapsing...
Pick 4 questions to answer that you feel confident that you picked the correct answer Regarding...
Pick 4 questions to answer that you feel confident that you picked the correct answer Regarding setting the budget for integrated marketing communications options: - all-you-can-afford approaches involve setting objectives and then specifying tasks needed to achieve them. - incremental technique tries to set budgets based on other firms’ decisions. - competitive budgeting establishes the same budget year after year. - percentage-of-sales methods tend to ignore the promotion-causes-sales relationship. Many advertisements work primarily through recognition which means - that the...
Fueling Indonesians: Window of Opportunity or Regret? Kerosene is widely used as cooking fuel by Indonesian...
Fueling Indonesians: Window of Opportunity or Regret? Kerosene is widely used as cooking fuel by Indonesian households, with an annual usage of 10 million Kiloliters. It is a major subsidized fuel for household cooking, where its usage is over sixty percent of the 230 million population. The subsidy program costs the government heavily, where it amounts up to U.S.$4 billion a year. As the practice tends to bleed government expenditures quite heavily, the Indonesian government is embarking on a change...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT