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Unformatted text preview: advantage and exchanging goods through trade. 3. What gives a country a comparative advantage in something? The main reason for differences in comparative advantage across countries is differences in factor endowments, such as population, natural resources, amount of human and physical capital, and other factors. In addition, specialized education, training, and investment can lead to an acquired comparative advantage. 4. What kinds of trade barriers are used to restrict trade? Tariffs, quotas, voluntary export restrictions, and export subsidies are the main tools of trade restriction. 5. Isn't it good to protect ourselves from foreign competition? Trade restrictions almost always lead to a net loss for an economy. They result in higher prices for both foreign and domestic goods and lower overall employment....
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This note was uploaded on 09/14/2009 for the course ECON 304L taught by Professor Staff during the Fall '07 term at University of Texas at Austin.
- Fall '07