Question
Recently, we observed the US president imposing tariffs on steel imports. Answer the following questions on the impact of this protectionist US policy: a. Proponents
Recently, we observed the US president imposing tariffs on steel imports. Answer the following questions on the impact of this protectionist US policy:
a. Proponents of the tariff argues that as a large country, the policies would improve US welfare, however opponents argues that it would cause welfare to deteriorate. Which group is right? Illustrate your answer with offer curves. (13 Marks)
b. In the aftermath of the introduction of the protectionism policy, the German Chancellor Angela Merkel was reported to advice the US that Ms Merkel warned that no one could win a "race to the bottom" and said the tariffs risked "hurting everyone". What does Chancellor Merkel mean by her statements? Support your answer with offer curves. (12 marks)
Please provide offer curves.
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