Suppose the Swiss government subsidized its watch-making industry, enabling Swiss producers to undersell foreign watch producers. The law of comparative advantage indicates that watch-importing nations would best take advantage of the Swiss subsidization policy by
a. setting a tariff high enough to just offset the subsidy granted to the Swiss watch-making industry
b. setting a declining quota on the import of Swiss watches such that the nation's domestic watch-making industry would continue to grow at the same rate as the rest of the economy.
c. setting a tariff such that the prices of Swiss and domestic watches to the consumer are equal.
d. gladly accepting the subsidy of the Swiss government, making the appropriate adjustment for the resources temporarily displaced from the domestic watch-making industry.
d
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If real GDP decreases, there is
A) an upward movement along the demand for money curve and no shift of the curve. B) a leftward shift of the demand for money curve. C) no movement along the demand for money curve and the curve does not shift. D) a downward movement along the demand for money curve and no shift of the curve. E) a rightward shift of the demand for money curve.
If the price in Japan of a U.S. dollar becomes a larger number of yen, the U.S. dollar has ________. The yen has ________ because it buys ________ dollars
A) depreciated; appreciated; more B) appreciated; depreciated; more C) appreciated; appreciated; fewer D) appreciated; depreciated; fewer E) appreciated; appreciated; more