1. Suppose the US implements a trade policy that produces an increase in imports
ID: 1210465 • Letter: 1
Question
1. Suppose the US implements a trade policy that produces an increase in imports. a) What special-interest groups in the US will most likely gain from the increased imports? b) What special-interest groups in the US will most likely lose from the increased imports? (Special interest groups include consumers; various industries; e.g. the domestic auto and computer industries; workers in different industries, e.g. steel workers and textile workers; and groups representing social causes like environmentalists and those supporting reform of working conditions.)
2. a) How would each individual’s standard of living be affected if each individual decided to be completely economically self-reliant? b) How would a nation’s standard of living be affected if each nation decided to be completely economically self-reliant?
3. a) Name some goods or services that are traded internationally. b) Name some goods or services that are not traded internationally. c) What are some differences between goods and services that are traded and goods and services that are not traded?
4. According to Section 1.6 of the Salvatore text, what are some current international economic problems and challenges?
Explanation / Answer
1.
a. Consumers in the US will most likely gain from the increased imports, since they get foreign quality goods in their hands. They must enjoy better comparison with domestic products in terms of quality, quantity, and price.
b. Domestic industries in the US will most likely lose from the increased imports, since their products will be in more competition.
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