Question

1. do tariffs and quotas improve or reduce overall economic efficiency? explain

2. free trade vs free protectionism: is one position a conservative position and the other a liberal position? if so, which is which? why?

3. Might the differences between the two positions be explained by a dichotomy other than that of conservative vs liberal? why?

4. do tariffs and quotas save jobs or do they cost jobs? why?

Answer 1

1. Yes. Tariffs and Quotas improve overall economic efficiency. Tariff rate is imposed on the imported goods as the tariff duty which mainly increases the domestic production and sales within the country and promotes the consumption of all basic needs of the people. Likewise Quotas determines the level of quantity of import entering to the domestic market for consumption. Both Tariff and Quotas increases the GDP of the inner domestic firms and thus more level of goods and services are produced by creating the massive employment opportunities within the country and acts as factor for economic efficiency in the long-run.

2. Free trade is the policy of conservative system supporters and the Free protectionism is the policy of liberal system supporters. Conservative system supports always implements the plan of free trade because they need to improve the trade and socio-cultural relation between all countries which can acts as stimulant factor of economic development of exchanging and using the comparative advantage of the use of goods and services. But in contrary, Liberal parties always supports free protectionism as they believed that free trade will hamper the inner growth of the country. So they want to protect the inner trade from the impact of outer-ring trade across the boundaries. So they imposed high tariff rates on imported goods.

3. The term Dichotomy can be well explain the difference between the two policies of conservatives and liberal operations. Dichotomy refer to the using the contrary operations which are prominently emphasize the growth of the inner country with the advantageous policy of free trade and the merits of attaining the global economic choice of trade relations across the countries. But here both the concepts are rest with the positive impact of dichotomy as it nearly has the negative reaction of both the policies which considered as the false dichotomy in nature,

4. Obviously, it is a proved fact that the tariffs and quotas save jobs in the inner parts of the country. If the effect of tariff rate and quotas reduces the more sale of more foreign goods entering in the market. It gives the fine chance of producing more goods and service by the firms of domestic country. In this case, demand of the domestic products increases with the increase in the supply of the local products. The price automatically reduces in order to equalize the rate of both the demand and the supply. As firm increases the capacity of production of its goods and services, which leads to creation of more employment opportunities.