POLS 365 Study Guide - World Trade Organization, The Myriad, Reserve Currency
Document Summary
For small winning coalition, private goods are key, however for large winning coalitions public goods are more important: free trade can be looked at as a public good for democracies, trade as a public good. As the domestic economy opens to trade, it specializes in area of its comparative advantage, and in turn production will increase. Country is wealthier under trade, and average income increases, citizens can buy more things and standards of living improve: trade as a private good. If the domestic equilibrium price reflected average domestic production costs, only those producers with costs below the post-trade price can survive. Less efficient producers are competed out of business, more efficient benefit from foreign markets, economy has more, country is wealthier but leaky boats sink. Question 22 talks about tariffs and the answer is a. What sort of a signal do sanctions send: resolve.
