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13.Rather than generating tax revenue, as do tariffs, subsides require tax revenue. Therefore, they are not an effective protective device for the home economy. Do you agree? 14.In 1980, the U.S. auto industry proposed that import quotas be imposed on foreign-produced cars sold in the United States. What would be the likely benefits and costs of such a policy? 15.Why did the U.S. government in 1982 provide import quotas as an aid to domestic sugar producers? 16.Which tends to result in a greater welfare loss for the home economy: (a) an import quota levied by the home government or (b) a voluntary export quota imposed by the foreign government? 19
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Chapter 6: Nontariff Trade Barriers 17.What would be the likely effects of export restrains imposed by Japan on its auto shipments to the United States? 18.Why might U.S. steel-using firms lobby against the imposition of quotas on foreign steel sold in the United States? 19.Concerning international dumping, distinguish between the price-based and cost-based definition of foreign market value. 20