What are the different types of trade barriers? What are the arguments for trade barriers? What are the consequences of trade barriers?
What will be an ideal response?
Trade barriers include the use of embargoes, tariffs, quotas, and administrative barriers to limit the supply of foreign products in the domestic economy. Arguments for trade barriers include the infant industry, national security, employment, and cheap foreign labor arguments.Trade barriers reduce the supply of foreign products, which increases their prices. This makes the domestically produced substitute more price-competitive, which increases the demand for the domestically produced product. As a result, the domestically produced product's price increases and its sales increase. Notice that the results of trade barriers are higher priced products (both foreign and domestically produced) consumers must pay.
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The economic boom between 2002 and 2006 was primarily a result of
a. a reduction in stock prices along with rising oil prices. b. a sharp reduction in the real price of resources and wages. c. an increase in both housing and stock prices. d. an increase in both resource prices and interest rates.
An example of a perfectly competitive market would be the market for
a. electricity. b. soybeans. c. coffee shops. d. restaurants.