It has been claimed that foreign governments have attempted to influence votes in the U.S. that would promote policies of protectionism within the U.S
On the surface this appears to be totally illogical and counter intuitive, as this would presumably lessen the possibilities of foreigners' exports to the U.S.
This would make sense only if the form of protectionism is a tariff. However, if it is a quota, then the scarcity rents may be captured by established foreign producers. Hence, the reaction of the Japanese to automobile quotas was to dramatically increase the high-end, highly profitable automobiles. This would be even more self-evident if the protectionism took the form of a Voluntary Export Restraint (VER), or a detailed formalized bilateral cartel, such as the old Multi-Fibre Agreement.
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Which will be TRUE for a monopolistic competitor experiencing short-run losses?
A) P > ATC B) P = ATC C) P < ATC D) P < MC
The Sherman Antitrust Act was passed to
A) protect companies from foreign competition. B) protect the monopoly profits of firms. C) control the growth of monopolies in the U.S. D) prevent market price from equaling marginal cost.
Suppose the Federal Reserve wanted to fight inflation by increasing interest rates. Doing so would
A. decrease aggregate supply. B. decrease aggregate demand. C. increase aggregate supply. D. increase aggregate demand.
Monetarists use the equation of exchange to predict the effects of changes in M on
A. velocity. B. nominal GDP. C. real GDP. D. the price level.