Discussion Forum

Select a developed country that has implemented a tariff, and a developing country that

Manufactures products that are impacted by that same tariff.

The current US and China tariff "war" cannot be used since these are the two largest economies in the world.

Investigate the impact of the trade barrier on the developing country's business sector and quantify the impact, if possible. Would you recommend that the developed country eliminate the tariff? Explain your reasoning, along with supported referencing.

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QUESTION 1

1.Which theory analyzes the income distribution effects of trade in the short run when resources are immobile among industries?

• The general-factors theory
• The specific-factors theory
• The income-factors theory
• The growth-factors theory

QUESTION 2

2.What is the term for the active involvement of the government in creating comparative advantage?

• Comparative policy
• Absolute policy
• Employment policy
• Industrial policy

QUESTION 3

3.Which one of the following refers to the transfer of the consumer surplus, in monetary terms, to the domestic producers of the import-competing product?

• The production effect
• The growth effect
• The redistributive effect
• The employment effect

QUESTION 4

4.Who investigated the factor endowment theory empirically for the first time in 1954?

• Peter Sinclair
• Robert Taylor
• David Ricardo
• Wassily Leontief

QUESTION 5

5.What is the term for the difference between the amount that buyers would be willing and able to pay for a good and the actual amount they do pay?

• Producer surplus
• Consumer surplus
• Growth surplus
• Employment surplus

QUESTION 6

6.Which one of the following is imposed to generate tax revenues and may be placed on either exports or imports?

• A revenue tariff
• A protective tariff
• An income tariff
• An employment tariff

QUESTION 7

7.Which one of the following occurs when the firm's average costs decrease as the industry's output increases?

• External economies of scale
• Internal economies of scale
• Marginal economies of scale
• Complete economies of scale

QUESTION 8

8.According to U.S. tariff law, dutiable imports can be brought into the United States and temporarily left in which one of the following venues, duty-free?

• A bonded warehouse
• A home warehouse
• A foreign warehouse
• None of the answers are correct

QUESTION 9

9.Which one of the following is like a sales tax and is expressed as a fixed percentage of the value of the imported product?

• A specific tariff
• A compound tariff
• An income tariff
• An ad valorem tariff

QUESTION 10

10.What is the term for a two-way trade in a similar commodity?

• Inter-industry trade
• Intra-industry trade
• Extra-industry trade
• None of the answers are correct

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Critical Thinking: Trade barriers

In a critical essay, evaluate trade barriers.

• Why do countries impose trade barriers?
• What is the effect of trade barriers on the trade balance, the employment, and the economic growth?
• Now choose a country (other than Saudi Arabia) and evaluate the arguments for and against erecting trade barriers in the chosen country. Supported referencing is required.