Chapter 21: Q.9 (page 522)
Explain how predatory pricing could be a motivation for dumping.
Short Answer
Selling products at a cheap rate is how predatory pricing could be a motivation for dumping.
Chapter 21: Q.9 (page 522)
Explain how predatory pricing could be a motivation for dumping.
Selling products at a cheap rate is how predatory pricing could be a motivation for dumping.
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Trade has income distribution effects. For example, suppose that because of a government-negotiated reduction in trade barriers, trade between Germany and the Czech Republic increases. Germany sells house paint to the Czech Republic. The Czech Republic sells alarm clocks to Germany. Would you expect this pattern of trade to increase or decrease jobs and wages in the paint industry in Germany? The alarm clock industry in Germany? The paint industry in the Czech Republic? The alarm clock industry in the Czech Republic? What has to happen for there to be no increase in total unemployment in both countries?
What are the conditions under which a country may use the unsafe products argument to block imports?
What is the general trend of trade barriers over recent decades: higher, lower, or about the same?
Is it legitimate to impose higher safety standards on imported goods that exist in the foreign country where the goods were produced?
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