1. Checkpoint: International Trade Debate Due Date: Day 5 (Assignments Link on Ecampus. Locate the Link to Submit Your Assignment as an Attachment) • Post a 250- to 300-Word Response to the Following Debate Topic:
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- Date Submitted: 10/18/2010 11:42 AM
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The world currency that is still placed on a mantle is the U.S. dollar; which has been declining in value over the past several years. The U.S dollar has become a detriment to the U.S. consumers and the U.S. companies that have products imported, which is weakening dollar benefits used by some players in the global marketplace. Over the past decade, outsourcing has been done to save us money, well now that we have had recessionary conditions, the “value” of our dollar has turned the attention from other countries to outsource to the U.S..
The additional interest rate cuts from the U.S. Federal Reserve could continue to lessen the return of investors at lower interest rates that could produce pressure on inflation; which would result lowering the dollar’s value as well as the budget and trade deficits. Goods that are traded and imported have taxes that are levied on businesses (Tariffs). Tariffs increase the domestic price, that will ultimately lead to decrease in demand and increase supply, above the world price by the amount of the tariff.
Quotas are restrictions on the amounts imported and have a similar effect as tariffs. They restrict the amounts that are available to the domestic consumers and they also drive the price, equating to deadweight and losses that are similar to that of a tariff. The main difference is the distribution of the surplus, and that the tariff raises revenue for the government, whereas the quota creates surplus for licensed holders. If license fee equals difference in prices, then the import quota will work the same as the tariffs.
"Global Currency." (n.d.): Facts On File: Issues & Controversies. EBSCO. Web. 17 Oct. 2010.
Anonymous. "Finance And Economics: Trial of strength; Currencies." The Economist 396.8701 (n.d.): 88. ProQuest: ABI/INFORM Complete. EBSCO. Web. 18 Oct. 2010.
Itoh, Motoshige, and Yoshiyasu Ono. "TARIFFS, QUOTAS, AND MARKET STRUCTURE." Quarterly Journal of Economics 97.2 (1982): 295-305. Business Source...
The additional interest rate cuts from the U.S. Federal Reserve could continue to lessen the return of investors at lower interest rates that could produce pressure on inflation; which would result lowering the dollar’s value as well as the budget and trade deficits. Goods that are traded and imported have taxes that are levied on businesses (Tariffs). Tariffs increase the domestic price, that will ultimately lead to decrease in demand and increase supply, above the world price by the amount of the tariff.
Quotas are restrictions on the amounts imported and have a similar effect as tariffs. They restrict the amounts that are available to the domestic consumers and they also drive the price, equating to deadweight and losses that are similar to that of a tariff. The main difference is the distribution of the surplus, and that the tariff raises revenue for the government, whereas the quota creates surplus for licensed holders. If license fee equals difference in prices, then the import quota will work the same as the tariffs.
"Global Currency." (n.d.): Facts On File: Issues & Controversies. EBSCO. Web. 17 Oct. 2010.
Anonymous. "Finance And Economics: Trial of strength; Currencies." The Economist 396.8701 (n.d.): 88. ProQuest: ABI/INFORM Complete. EBSCO. Web. 18 Oct. 2010.
Itoh, Motoshige, and Yoshiyasu Ono. "TARIFFS, QUOTAS, AND MARKET STRUCTURE." Quarterly Journal of Economics 97.2 (1982): 295-305. Business Source...