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Q. Describe the effects of the Smoot-Hawley tariff imposed by the United States in 1930.
Answer: It had a damaging consequence on employment abroad. The foreign response occupied retaliatory trade preferential and restrictions trading arrangements among a group of countries. This is an illustration of a "beggar-thy-neighbor" policy meaning a policy that benefits the home country only because it worsens economic conditions abroad.
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Q. It is probable that trade based on external scale economies can leave a country worse off than it could have been without trade. Illustrate how this could happen. Answer:
Explanation with critical appraisal
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Explain the classical theory of employment with relaxed assumption?
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