One argument for trade barriers is that U.S. producers pay higher wages than many of their foreign counterparts and that trade restrictions are necessary to protect U.S. workers from unfair competition brought about by low wage rates abroad. Is this a valid argument for protection?
What will be an ideal response?
Although workers in other nations may earn lower wages than their U.S. counterparts, this in itself does not constitute a valid argument for import protection. Low wages are often associated with low worker productivity; conversely, high wages may reflect high worker productivity. Thus the higher wage rate paid to the U.S. worker may be associated with greater output, lower unit costs of production, and greater profitability.
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Use the following table to answer the question below.(1)(2)(3)(4)(5)QdQdPriceQsQs5040$1070806050960708060850609070740501008063040Suppose that market demand is represented by two demanders in columns (1) and (2) and market supply is represented by two suppliers in columns (4) and (5). If the price were artificially set at $6
A. demand would change from (2) to (1). B. a surplus of 50 units would occur. C. the market would clear. D. a shortage of 110 units would occur.
In 2003, the largest component of U.S. GDP was
a. personal consumption expenditures b. government purchases c. durable goods d. net exports e. gross private domestic investment
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2. B. P1 and Y2. C. P4 and Y2. D. P1 and Y1.
Decreases in interest rates have made it less costly to finance purchases of new houses. What impact will this have on U.S. aggregate demand?
A. U.S. aggregate demand will decrease. B. None. A nation's aggregate demand is not affected by changes in interest rates. C. U.S. aggregate demand will remain unchanged. D. The U.S. aggregate demand curve will shift to the right.