MGC2120 Chapter Notes - Chapter 7: Capital Market, Infant Industry Argument, General Agreement On Tariffs And Trade

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International business chapter 7 the political economy of. Tariffs is a tax levied on imports (exports) fall in to 1: specific tariffs are levied as a fixed charge for each unit of a good imported. 2: ad valorem tariffs are levied as a proportion of the value of the imported good. important to understand who suffers and who gains. Firstly, tariffs are generally pro-producer and anti-consumer. Secondly, import tariffs reduce the overall efficiency of the world eco. Subsidies is a government payment to a domestic producers. May take forms of cash grants, low-interest loans, tax breaks, and government equity participation in domestic firms. Subsidies help domestic producers by 1: competing against foreign imports, Agriculture has large subsidies compare to non-agriculture. In reality, subsidies are not that successful at increasing the international competitiveness. Import quotas and voluntary export restraints import quota: a direct restriction on some good"s quantity that may be imported into a country.

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