Imposing trade restrictions


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Question 1. What is the infant industry argument? Is it likely to be valid for a mature economy like that of the United States? If it is valid what would be a better solution than imposing trade restrictions?

Question 2. It may be cheaper to pay a worker displaced by imports his or her salary than to impose a tariff or quota on imported goods in order to save his or her job. Explain using examples

Question 3. Suppose the British pounds for U.S. dollar exchange rate falls. Does the dollar appreciate or depreciate? Defend answer.

Question 4. Suppose the U.S dollar appreciates relative to the Japanese yen. How will the exports and imports on the two countries be affected.

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Microeconomics: Imposing trade restrictions
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