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Chapter 9 HMWK

After reading these essays what do you think about protecting manufacturing industries from international trade? Who will benefit from the tariffs on steel and aluminum?  Who will lose?  Do you think more people will benefit than will lose? Why or why not?
Look up the employment trends in manufacturing.  (Try the Bureau of Labor Statistics).  When did manufacturing employment reach its peak? Why do you believe manufacturing employment is declining?




Just like an earlier example in the textbook about how technological innovations have made it possible for only 3% of the US population to produce our food, it is not surprising that manufacturing industry jobs are also declining in the same manner. But even as the demand for basic jobs decreases, it will only transfer demand because now we'll need people to oversee the technologies and work in other fields that are the result of innovation. Increasing productivity is what will bolster economic welfare.

Setting tariffs on steel and aluminum in order to protect domestic manufacturing industries from more competitive world markets will make domestic sellers better off but domestic buyers will be worse off. A tariff improves the welfare of domestic sellers, but because of the deadweight losses from the tax, domestic buyers will be worse off. In turn, buyers will have less money (whatever the size of the tariff) to spend in other industries. So more people will lose than will benefit.

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