Tariff on automobiles imported from germany


Problem: Suppose the United States increases the tariff on automobiles imported from Germany (and other foreign countries). What is the effect of this tariff-rate increase on

1) The price of automobiles in the United States;

2) The total number of cars sold in the U.S. during the year;

3) The number of cars produced by and employment in the German automobile industry;

4) Production by and employment in the U.S. automobile industry;

5) German income obtained by selling cars in the U.S;

6) The German demand for goods produced in the U.S;

7) The production of and employment in those U.S. industries that now export goods to Germany;

8) The allocation of resources in the U.S. economy; and

9) The allocation of the world's resources?

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Macroeconomics: Tariff on automobiles imported from germany
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