Economics Chapter 6 and 7

Economics Chapter 6 and 7 - other countries as they...

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Ships $1M Camrys used for lumber, which increases lumber employment Mr. Toyota ships back a mil US ships $1 million Japan otor companies, employment goes down Economics Chapter 6 and 7 The minimum wage causes unemployment amongst low-skilled workers It affects prejudice in that it increases hiring based on nepotism, race or sexual orientation Competitive labor market wages must increase as labor becomes more skillful and valuable Minimum wages increase tension and intensity between employees, employers and their job s More output is also made to increase as fewer breaks are taken Fair Labor Standard Act 1938 Encourages illegal hiring Theory without minimum wage Equilibrium between supply and demand establishes common wage rate in an industry (competition between firms) International Trade Mercantilism It is a view that the purpose of international trade is for each country to accumulate as much money from
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Unformatted text preview: other countries as they possibly can. They advocate policies that encourage exports and buy as little i.e maximize exports, minimize imports Adam Smith wrote that mercantilism was the dominant view. He almost single-handedly destroyed mercantilism as an honorable view. The nature of wealth is not money but things to consume. To keep it working, high tariffs were encouraged to stop local consumers from buying foreign products. Reasons against Free trade: 1. Free trade reduces employment 2. Free trade results in trade deficits 3. Free trade reduces wages Trade shifts employment, it does not increase it. Protectionists may want to stop import of Camry’s. Now Japanese do not have $1million and decrease demand for lumber. This employment in lumber industry falls....
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