Why do both developed and less-developed countries protect clothing and textiles heavily?
What will be an ideal response?
For developed countries, comparative advantage has been lost in these labor-intensive industries. For less-developed countries, these are major export sectors that also have a significant domestic market share, and so it is desirable to protect domestic markets while exporting these goods (in which they have a comparative advantage).
You might also like to view...
Suppose the marginal propensity to consume (MPC) is 0.8 and there is a $2,000 increase in autonomous consumption. Given this information, real GDP will increase by
A) $10,000. B) $2,500. C) $1,600. D) $2,000.
In economics, the term "equity" means
A) economic benefits are distributed fairly. B) everyone has an equal standard of living. C) the hardest working individuals consume all they want. D) only elected officials have high standards of living.