IBUS-300 Lecture Notes - Lecture 7: Infant Industry Argument, Import Quota, Caribbean Community
11 Dec 2018
School
Department
Course
Professor
Document Summary
Chapter 7 goverment policy and international trade (ricardo) 1 tariffs are generally pro producer and anticosumer. 2 import tariffs reduce the overall efficiency of the world economy. Subsidies: goverment financial assistance to a domestic producer. Uncertain if it really beneffits the local economy. Import quota: is a direct restriction on the quantity of a good that can be imported into a country. Tariff rate quota: lower tariff rates applied to imports within the quota than those over the quota. Voluntary export restrain: a quota on trade imposed from te exporting country"s side, instead of the importe"s. Usually imposed at the request of the importing country"s goverment. This beneffits domestic producers by limiting import competition. Quota rent extra profit producers make when supply is artificially limited by an import quota. Local content requirments: a requirment that some specific fraction of a good be produced domestically.
