10. In a two country and a two commodity world, an imposition of home countrys import tariff...

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10. “In a two country and a two commodity world, an imposition of home country’s import tariff increases its terms of trade and export subsidy reduces its terms of trade”—explain. If an import tariff increases the home country’s terms of trade, then, at present, why do countries agree to reduce the tariffs under bilateral and multilateral free trade agreements?

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International Finance Theory And Policy

ISBN: 9781292019550

10th Edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz

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