Explain why each of the following is not a valid argument for protection
(a) patriotism
(b) fair play (e.g. level international playing fields)
(c) preservation of jobs
(a) Protection can lower welfare, which would be unpatriotic.
(b) The notion of fair play does not conform well to the real world. Fair play for producers would be unfair for consumers, etc.
(c) Protection tends to redistribute jobs rather than create new ones.
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The government purchases component of aggregate demand includes
I. all purchases by government agencies of goods and services produced by firms. II. direct production by government agencies themselves. III. government expenditures on transfer payments. A) I only B) I and II only C) I and III only D) I, II, and III
Refer to the figure above. The quota restricts trade by the same amount as a tariff of
A) $20. B) $30. C) $50. D) Cannot answer without more information.