Problem

Is international trade likely to have roughly the…

01:05

Problem 23 Medium Difficulty

Does international trade, taken as a whole, increase the total number of jobs, decrease the total number of jobs, or leave the total number of jobs about the same?

Answer

International trade neither increases the total number of jobs nor it decreases the total number of jobs. The number of jobs basically remains same if only international trade is considered, it just reshuffles the jobs between countries and industries.

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Principles of Microeconomics for AP® Courses

Chapter 20

Globalization and Protectionism

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Video Transcript

all right. So terrible to be talked about international trade and the effect it has on jobs. Right? So let's break it down. So international trade, we know is the exchange of goods and services across international border. Right? And the main concept behind international trade is protectionism. Right? So then images down protection of them may have read in nurse textbook, but it basically means that the government protect certain industries from foreign cop foreign competitors or, uh, outside competition. Uh, that may harm companies within their home country. Right. The dad protectionism through barriers, right, Terra barriers. Not their barriers, you know, quotas and and a bunch of other restrictions to international trade. Right. And we know that the protected industry, um from the government will save more jobs than the unprotected right due to all the funding to get and the help to get from the government to Teoh compete with foreign multinational companies. Right? So there are two reasons why this happens. One. Um jozic. The first reason is that consumers will play pay a higher price to the protective industry. Great consumers they hired Price. Just be up here, right? So when consumers pay a higher price on protect. Sorry. Sorry. What? Consumers pay a higher price to the protected industry. They will have less money to spend on other industries. Right. So the dollar can only be stretched out so much ready to spend more of it in one area. Didn't have less to spend in the other area. And therefore the other area, which is the unprotected industry here, Right. They will get less off the money and therefore, um, absolutely off lay off their employees to maintain a steady profit margin. Rights of protective protectionism will help this industry the protector one and in turn, lose jobs and the unprotected. The second concept of protectionism that effects, um the jobs is that if the protected industries being sold to other firms, right, so being sold and this this means that the unprotected industry will have to pay lots of extra money, right, Teoh by the key input from the protective industry, and thus they will lose sales to foreign competitors, right? And producers who pay a cheaper price for input. So when these guys, when the unprotected industry here, untested eyes, the key input from this protection, this protected industry, they're paying more for a key input that foreign competitors or other multinationals have to pay a cheaper price too, right? And because off that difference in expenses, this industry will, um, make less profit and in turn, lose jobs. Right? So therefore, protects protecting one industry. This one that we've talked about suspecting this one industry will lead to a loss of jobs in this industry, which is the unprotected work, right? So it relates back to the overall com con Saariaho overall concept of economics, which is opportunity costs right. Which industry you are going to save at the expense of the other industry. Right, So protects protectionism from international trade, will reshuffle jobs, right, would take jobs from this one and give it here and vice versa, depending on which way which way the government's protecting, um so it does not create nor lose job. It just remains the same and shuffles around a bit. And, um, the international trade overall doesn't really increase or reduce jobs to the left

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Steven A. Greenlaw, David Shapiro, Timothy Taylor

Principles of Microeconomics for AP® Courses

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Problem

Is international trade likely to have roughly the…

Problem 23 Medium Difficulty

Does international trade, taken as a whole, increase the total number of jobs, decrease the total number of jobs, or leave the total number of jobs about the same?

Answer

International trade neither increases the total number of jobs nor it decreases the total number of jobs. The number of jobs basically remains same if only international trade is considered, it just reshuffles the jobs between countries and industries.

Related Courses

Principles of Microeconomics for AP® Courses

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Watch More Solved Questions in Chapter 20

Video Transcript

Steven A. Greenlaw, David Shapiro, Timothy Taylor

Principles of Microeconomics for AP® Courses

International trade neither increases the total number of jobs nor it decreases the total number of jobs. The number of jobs basically remains same if only international trade is considered, it just reshuffles the jobs between countries and industries.

Principles of Microeconomics for AP® Courses

Steven A. Greenlaw, David Shapiro, Timothy TaylorPrinciples of Microeconomics for AP® Courses

Steven A. Greenlaw, David Shapiro, Timothy Taylor

Principles of Microeconomics for AP® Courses