International Trade 1. Abraham Lincoln once said "It is better to buy American goods than to buy foreign goods, because when we buy American goods, we get the goods and our money stays here, but when we buy foreign goods, we get the goods but our money leaves the country." a. We know that Honest Abe was a pretty smart guy. But how good an economist was he? In particular, does the statement above make good economic sense? Explain why or why not. 2. Many people will tell you that, whenever possible, you should always buy US- made products. Some will go further and tell you that you should spend your money on goods produced in your state whenever possible (for example, ). The idea is that if you spend your money in your state, then you help the economy of your own state, rather than the economy of some other state. a. By that logic, then, shouldn't you only buy stuff produced in your own county? Or your own town? Or in your own neighborhood? Or in your own home? What, if anything, is incorrect about this logic? 3. On April 23, 2021, the average price of raw sugar around the world was 17 cents per pound. In the U.S, the average price of raw sugar was 28.4 cents per pound. That is, the U.S. price is about 50% higher than the price in the rest of the world. This has been true for decades. The short explanation for the higher price in the US is that the US government has placed a very high tariff on imported sugar. As a result of the higher price, US consumers spend an extra $2 billion each year on sugan a. Why would members of Congress approve a tariff that costs US consumers more than $2 billion each year