Chapter 34: Problem 17
What might account for the dramatic increase in international trade over the past 50 years?
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Chapter 34: Problem 17
What might account for the dramatic increase in international trade over the past 50 years?
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Why is trade a good thing if some people lose?
How does competition, whether domestic or foreign, harm businesses?
What are some ways that governments can help people who lose from trade?
Why would countries promote protectionist laws, while also negotiate for freer trade internationally?
Trade has income distribution effects. For example, suppose that because of a government-negotiated reduction in trade barriers, trade between Germany and the Czech Republic increases. Germany sells house paint to the Czech Republic. The Czech Republic sells alarm clocks to Germany. Would you expect this pattern of trade to increase or decrease jobs and wages in the paint industry in Germany? The alarm clock industry in Germany? The paint industry in Czech Republic? The alarm clock industry in Czech Republic? What has to happen for there to be no increase in total unemployment in both countries?
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