Asked by Mason Rogers on May 11, 2024
Verified
Suppose that in the absence of trade, the U.S. price for peas was lower than the world price for peas. Would allowing international trade mean that the United States would import or export peas? Who in the United States would benefit and who would lose with a free trade policy, and would the gains be greater than the losses?
Free Trade Policy
A governmental policy aimed at eliminating barriers to trade between countries, such as tariffs and import quotas.
International Trade
The exchange of goods and services across international borders or territories, which allows countries to expand their markets for both goods and services that otherwise may not have been available domestically.
- Absorb the rudimentary conceptions and discussions for and against globalization and free trade.
- Assess the repercussions of global market exchanges on employment rates and industries across nations with varying levels of wages.
Verified Answer
DG
Desmond GrenardoMay 17, 2024
Final Answer :
The United States would export peas as producers increased output to take advantage of the higher world price. The U.S. price would rise to meet the world price, and U.S. producers would gain, while U.S. consumers would lose. The gains to producers would, however, outweigh the losses to consumers.
Learning Objectives
- Absorb the rudimentary conceptions and discussions for and against globalization and free trade.
- Assess the repercussions of global market exchanges on employment rates and industries across nations with varying levels of wages.