Suppose as the result of the Civil War that the United States had been divided into two countries and that, through the years, high trade barriers had grown up between the two. How might the standard of living in the “divided” United States have been affected? Explain.

*4. Can both of the following statements be true? Why or why not?

a. “Tariffs and import quotas promote economic inefficiency and reduce the real income of a nation. Economic analysis suggests that nations can gain by eliminating trade restrictions.”

b. “Economic analysis suggests that there is good reason to expect that trade restrictions will exist in the real world.”