Module 9 Assignment

Module 9 Assignment

1. What are some of the reasons for trade barriers? Which type of trade barrier is most effective?

There are a few reasons to have trade barriers. If a person is a productive member of society, and they have a job in such occupations as the manufacturing industry, they need protection. From what? From foreign competitors. This seems strange and if it were on the local level, somewhat similar to a monopoly. However foreign competitors cannot monopolize the market. This would hurt the locals. So they increase the tariffs so that they can not out compete with the locals.

They also nurture infant industries. Sometimes a new form of company is in its developing stages and eventually they become a competitor. Companies eventually become efficient and the barriers can be lifted, but are sometimes not lifted.

Policymakers also help their own businesses monopolize on the world market. If they offer support of the correct businesses they will increase their own jobs. They will help the growth of the company and make them a world dominating company when they increase their revenues.

Tariffs seem to be more effective when it comes to policies. If they are fairly implemented they do serve a purpose to aid in the domestic product, and help increase local revenues.

2. Are you willing to put up with trade barriers (which means you pay more for products) to try to re-grow our production capability in the US?

No. I will buy what I want and if it is not the price that I want, I can go without. This is what will happen with me, and many other people. If prices are not low enough, I will not be a consumer. Bring the prices at a more seemingly affordable level, then I might reconsider the option.

Most of the world has floating exchange rates, which means the rate is determined constantly based on the demand and supply for one currency vs. another. The countries of the European Union have chosen to share a common and therefore fixed currency among...