In your own words explain the International Trade and Tariffs theory. Theory #4: International Trade and Protective
Fantastic news! We've Found the answer you've been seeking!
Question:
In your own words explain the International Trade and Tariffs theory.
Transcribed Image Text:
Theory #4: International Trade and Protective Tariffs Caused the Great Depression Although America prospered greatly during the period following World War I, this economic boom depended largely on factors and events outside the borders of the United States. Following the war, European demand for American manufactured goods and agricultural products was at an all-time high, given that much of Europe was literally destroyed in the war itself. As goods produced in the U.S. were shipped across the Atlantic, the American economy was flooded with money coming from European consumers. This state of things began to change in the late 1920s, as European demand for American goods began to decline. This was partly because European industry and agriculture were becoming more productive and partly because some European nations were having financial difficulties of their own. Europe's financial troubles were due largely to the international debt structure created after the war, which created a system where Britain and France would pay back their wartime debt to the United States with the reparation payments they received from Germany and Austria, who were forced to pay the Allies back for starting the war. When Germany and Austria failed to pay Britain and France, these countries in turn defaulted on [failed to pay) their loans to the United States, leading to a general financial crisis. To make matters worse, in 1930 President Herbert Hoover passed the Smoot-Hawley Tariff, which placed a tax on foreign-made goods entering the United States. This caused America's European trading partners to pass similar protective tariffs, and soon the amount of goods being traded between countries sharply declined. As glob demand for American products dried up, manufacturers like the Ford Motor Company in Michigan were forced to fire workers in order to cut costs, leading to a process that eventually crashed the American economy. Theory #4: International Trade and Protective Tariffs Caused the Great Depression Although America prospered greatly during the period following World War I, this economic boom depended largely on factors and events outside the borders of the United States. Following the war, European demand for American manufactured goods and agricultural products was at an all-time high, given that much of Europe was literally destroyed in the war itself. As goods produced in the U.S. were shipped across the Atlantic, the American economy was flooded with money coming from European consumers. This state of things began to change in the late 1920s, as European demand for American goods began to decline. This was partly because European industry and agriculture were becoming more productive and partly because some European nations were having financial difficulties of their own. Europe's financial troubles were due largely to the international debt structure created after the war, which created a system where Britain and France would pay back their wartime debt to the United States with the reparation payments they received from Germany and Austria, who were forced to pay the Allies back for starting the war. When Germany and Austria failed to pay Britain and France, these countries in turn defaulted on [failed to pay) their loans to the United States, leading to a general financial crisis. To make matters worse, in 1930 President Herbert Hoover passed the Smoot-Hawley Tariff, which placed a tax on foreign-made goods entering the United States. This caused America's European trading partners to pass similar protective tariffs, and soon the amount of goods being traded between countries sharply declined. As glob demand for American products dried up, manufacturers like the Ford Motor Company in Michigan were forced to fire workers in order to cut costs, leading to a process that eventually crashed the American economy.
Expert Answer:
Answer rating: 100% (QA)
Tariffs are the taxes imposed on imported goods to make them more expensive then they would otherwis... View the full answer
Related Book For
Posted Date:
Students also viewed these american history questions
-
In your own words explain the time value of money. From your own life (either now or in a situation that might occur in your future), provide an example in which the time value of money would be...
-
In your own words explain the time value of money. From your own life (either now or in a situation -that might occur in your future), provide an example in which the time value of money would be...
-
In your own words explain the "innovator's dilemma". Provide supporting discussion and examples. Identify, describe and provide examples of the various types of innovation. What challenges does...
-
Midland Corporation has a net income of $19 million and 4 million shares outstanding. Its common stock is currently selling for $48 per share. Midland plans to sell common stock to set up a major new...
-
Why are the job description and the application blank so important in employee selection?
-
Spirit AeroSystems (SAS) provides aircraft maintenance, repair, and overhaul (MRO) services to the aviation industry. Competitors in the aviation industry increasingly recognize the importance of...
-
Logan Corporation loans money to start-up businesses that cant obtain traditional bank loans. The company loans the business money in exchange for a single future payment. Logan Company wants to make...
-
Greene Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2013. 1. Sales: Quarter 1,...
-
Bill Greenis thegeneral manager for Poolco, a company that provides home pool maintenance services in the LA area. He is responsible for developing an inventory policy regarding all items that the...
-
A dog training business began on December 1. The following transactions occurred during its first month. December 1 Receives $23,000 cash as an owner investment in exchange for common stock. December...
-
A new process to produce adipic acid from cyclohexene has been developed. The fixed capital investment of the process that utilizes 800 ktons/year cyclohexene was estimated to be 150 million in...
-
What is the firm's cash flow from financing? Category Prior Year Current Year Accounts payable 3,106.00 5,941.00 Accounts receivable 6,870.00 9,032.00 Accruals 5,770.00 6,155.00 Additional paid in...
-
Marigold Corporation issued 3 2 9 shares of $ 1 0 par value common stock and 1 0 5 shares of $ 5 0 par value preferred stock for a lump sum of $ 1 5 , 3 7 2 . The common stock has a market price of $...
-
Rodriguez Corporation issues 14,000 shares of its common stock for $237,500 cash on February 20. Prepare journal entries to record this event under each of the following separate situations. 1. The...
-
A S + B C In the figure above, charge A is -4.40 nC, charge B is 17.6 nC, and charge C is -4.40 nC. If s = 1.00 cm, what is the electric field at the dot?
-
An apartment complex has 100 two-bedroom units. The monthly profit (in dollars) realized from renting out x apartment units is given by the following function. P(x)=-10x2+1,660x - 43,000 To maximize...
-
Question 1 1 pts The covariance between (the returns of) two stocks (Saguaro & Sandstorm) is -0.005 Saguaro's returns have a standard deviation of 27% Sandstorm's returns have a standard deviation of...
-
On April 29, 2015, Auk Corporation acquires 100% of the outstanding stock of Amazon Corporation (E & P of $750,000) for $1.2 million. Amazon has assets with a fair market value of $1.4 million (basis...
-
Choose the better of the undesirable alternatives. The three economic criteria for choosing the best alternative are minimize input, maximize output, and maximize the difference between output and...
-
An investor has carefully studied a number of companies and their common stock. From his analysis, he has decided that the stocks of six firms are the best of the many he has examined. They represent...
-
Dick Dickerson Construction Inc. has asked to you help them select a new backhoe. You have a choice between a wheel-mounted version, which costs $50,000 and has an expected life of 5 years and a...
-
Which variance considers production capacity not used? a. Variable overhead efficiency b. Labor efficiency c. Variable overhead spending d. Materials efficiency
-
When should standard costs be established and how often should such standards be changed?
-
Standard costs can be set too high or too low for motivational purposes. Comment.
Study smarter with the SolutionInn App