Chapter 46 – protectionism

Negative effects of protectionism: Increased . price. of goods . Fewer . imports. The above → Loss of consumer surplus. Resource . mis-allocation (see triangles ‘b’ and ‘d’ in the trade diags) Reciprocal. BTT (“tit-for-tat” barriers) Loss of jobs. in M sector . Higher prices → ↓Yreal . Protectionism creates “comfort zones ................
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