1.

Friedman

Whether it's Donald Trump (Links to an external site.) complaining "we don't win on trade" or Hillary Clinton (Links to an external site.) vowing to appoint a "chief trade prosecutor," our two main candidates for president are both campaigning on the idea that government needs to protect us from any foreigner who would sell us something at a better price than we could get at home.

Where's Milton Friedman when you need him?

In 1980, the Nobel Prize-winning economist brought the message of free markets and free trade into the homes of ordinary Americans via an extraordinary public television series called "Free to Choose." He did so without apology, without a prepared script and in plain languagemoral as well as practicalthat you didn't have to be an economist to understand.

He also did it against the prevailing mood that while free markets might be nice in theory, in reality what America needed was a healthy shot of protectionism: e.g., "voluntary" restrictions on Japanese cars, stronger anti-dumping statutes and greater enforcement of state "buy American" laws.

Is it so much different today? In an age when the global economy has helped lift billions out of abject poverty and put in the pockets of our children iPhones with more processing power than the computers NASA used to put a man on the moon, trade has become a dirty word.

The negatives of trade seemed to be confirmed by a now-famous 2012 graphic by economist Branko Milanovic, which plots how much real income has grown between 1988 and 2008 by income percentiles of the global population. Called the "elephant chart" because of its shape, it appears to prove the Trump-Clinton critique: that the winners from trade are foreigners and our top 1%, while the losers are the working and middle class in the developed West, including the U.S.

But the London-based Resolution Foundation has now recrunched the numbers to adjust for factors including population growth and the collapse of the U.S.S.R. When it did, it found that though income growth for the U.S. working and middle classes was smaller than for their peers in other Western economies, it was not stagnant.

In a recent Financial Times story, Resolution Foundation director Torsten Bell sounded a distinctly Friedmanite note: "Although globalisation brings a range of challenges for lower income families, we need to be clear that weak income growth generally is rooted in domestic policy, and blaming globalisation takes the pressure off governments."

What might such pressure look like? Well, Harvard economist Edward Glaeser suggests we might, for example, consider the way well-intentioned government programs can boomerang by discouraging workeverything from minimum-wage hikes that make low-skilled young men more expensive to hire to the huge marginal tax rates that kick in when, say, a single mom using some government benefit gets a job.

No one denies that Americans can lose jobs when an industry abroad is selling a good or service at a better price. But the high-employment, mass-manufacturing economy of the postwar years is not coming back no matter how high tariffs are or what we do to countries who manipulate their currencies. Even more interesting, the Resolution Foundation study reports average real income growth for lower- and middle-class workers in the U.K. was much higher than for their American counterparts, even though the U.K. has an economy that is more, not less, dependent on trade.

For his part, Friedman would ask by what right should an American be prevented from buying a lawful good or service if he found a better price from someone overseas? Where's the morality of keeping a worker from selling the product of his labor to someone who happens to live in another country? And the following was Friedman's response on "Free to Choose" when a union official challenged him on his bid to eliminate all tariffs over five years:

"The social and moral issues are all on the side of free trade. And it is you, and people like you, who introduce protection who are the ones who are violating fundamental moral and social issues.

"Tell me, what trade union represents the workers who are displaced because high tariffs reduce exports from this country, because high tariffs make steel and other goods more expensive, and as a result, those industries that use steel have to charge higher prices, they have fewer employees, the export industries that would grow up to balance the imports, tell me what union represents them? What moral and ethical view do you have about their interests?"

This is for the Friedman article.

Per the Resolution Foundation, ______________ benefited more from trade and this is due to their ________________ average real income growth.

Group of answer choices

A/The U.K.'s lower and middle class workers; lower

B/The American's lower and middle class workers; higher

C/The American's lower and middle class workers; lower

D/The U.K.'s lower and middle class workers; higher

2. This is for the Friedman article.

Critical thinking and tying this with the article: From what you've learned, a big increase in themarginaltax rate, as additional hours are worked, will give the incentives for the solo mother to work ______________.

***Focus on the word marginal.***

Group of answer choices

A/less

B/more

C/the same

3. This is for the Friedman article.

Per the article, the ________________________ will make low skilled workers more expensive to hire.

Group of answer choices

A/Maximum wage

B/Minimum wage

4.This is for the Friedman article.

Per the article, as suggested by the Harvard economist, the low income growth is due to ___________________.

Group of answer choices

A/Trade policies

B/Globalization

C/Domestic policies

5.Airbus

The long-running battle over billions of dollars in state subsidies to Airbus Group SE (Links to an external site.) and Boeing (Links to an external site.) Co. intensified on Thursday when the World Trade Organization ruled that European governments had failed to end unfair funding to the European plane maker.

The ruling moves the U.S. one step closer to being able to impose more than $5 billion in annual tariffs against goods and services from the European Union as soon as next year, according to U.S.

The WTO said in a 574-page report that the EU and some of its member states "failed to comply" with an earlier ruling to remove the subsidies or void their effect to Airbus. EU compliance efforts fell short, the WTO said.

The trade body in a future ruling is expected to find that the U.S., similarly, didn't sufficiently address concerns about subsidies benefiting Boeing (Links to an external site.). It could lead to the EU being allowed to impose similar sanctions on U.S. exporters.

Airbus, the world's No. 2 plane maker, and its larger rival Boeing are locked in a fierce battle for market share. After airlines went on a multiyear plane buying binge, the value of their combined backlogs of commercial airplanes has risen to almost $1.4 trillion. Still, both makers argue they have lost deals to the other. The Geneva-based trade adjudicator said that Airbus received subsidies for its new A350 XWB long-range plane, though it rejected the U.S. claim these were "prohibited subsidies" that have to be remedied expeditiously.

The WTO hadn't previously passed judgment on support to the A350 because the program in its current form was launched only after the U.S. initially raised its subsidy concerns (Links to an external site.) with the trade body in 2004. Airbus only formally began the A350 XWB program in 2006 to challenge rival Boeing's 787 Dreamliner. U.S. Trade Representative Michael Froman called the ruling "a sweeping victory" and urged the EU to halt subsidies to Airbus "immediately."

An Airbus spokesman said the U.S. was mischaracterizing the WTO findings.

The European Commission, the EU's executive arm, defended its actions. "An important win for the EU is that the panel rejected new U.S. claims that repayable support for the Airbus models A350XWB and A380 are 'prohibited subsidies,'" the commission said.

Plane subsidies are becoming an increasingly hot topic. Canadian plane maker Bombardier (Links to an external site.) Inc. got a capital injection (Links to an external site.) from the Quebec government in exchange for a stake in the CSeries single-aisle program. The move has been criticized by rival plane makers.

China and Russia also are developing new single-aisle planes, raising concerns that they will aim to sell them with large government backing.

Boeing Chief Executive Dennis Muilenburg called the latest WTO ruling "a victory for fair trade world-wide and for U.S. aerospace workers, in particular."

The Airbus spokesman said Boeing "remains in denial that billions of grants for the 787 and 777 have been declared completely illegal by the WTO."

The commission signaled it might appeal. "There are certain findings of the panel that we consider to be unsatisfactory," it said. Trade experts believe the WTO dispute could drag on for years.

Mr. Froman said the subsidies the EU, Germany, France, the U.K. and Spain had provided to Airbus "have cost American companies tens of billions of dollars in lost revenue."

The two sides settled a previous dispute over subsidies in 1992, but the U.S. walked away from that deal in 2004, arguing Airbus had an unfair advantage. Efforts to return to the negotiating table have failed.

A U.S. trade official Thursday said talks with the EU could resume, but only after government loans to Airbus were repriced to commercial rates.

The lack of progress in settling the subsidy spat is seen as another reflection of poor trans-Atlantic trade relations at a time negotiations on a far more sweeping trade deal appear stalled.

The WTO also is expected to rule in the coming months on a challenge the EU filed against subsidies it alleges Boeing has received for the 777X, the U.S. manufacturer's newest long-haul plane. The EU first raised the issue with the WTO in late 2014. The case is moving more quickly because its scope is narrower than the earlier two cases. In it, the EU is challenging tax breaks Boeing has received linked to the new long-haul plane launched in November 2013.

This is for the Airbus article.

As mentioned in the article, this type of domestic _______________ benefits ______________________.

Group of answer choices

A/Tax; international worker

B/Subsidy; international workers

C/Tax; domestic workers

D/Subsidy; domestic workers

6.

This is for the Airbus article.

Per the article, what is Airbus being investigated and charged with?

Group of answer choices

A/Airbus is being taxed by the U.S.

B/Airbus is being subsidized by the European Union.

C/Airbus is being subsidized by the U.S.

D/Airbus is being taxed by the European Union

7. This is for the Airbus article.

Per the article, the EU _________ successful in cutting off illegal subsidies to ________________.

Group of answer choices

A/Was; Airbus

B/Was; Boeing

C/Was not; Boeing

D/Was not; Airbus