• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Economics Coursework on Macroeconomics

Extracts from this document...


The article talks about the Mexican government wants to raise tariffs on U.S. exports. Those tariffs 1would effect and target about 90 U.S. industrial, agricultural products delivered to Mexico. The American concerns are these: tariffs are against the basics of the North American Free Trade Agreement (NAFTA). The other opinion is about these changes is that "these actions that only serve to harm American businesses during these tough economic times when these businesses need a worldwide marketplace to prosper". Mexican government' decision is clear example of protectionism. I am going to analyse the affects of those tariffs on both of the countries. Figure 1: the affect of the tariff what raised on the U. S export Price($) S (Domestic) Pe Pu+t a b c d e f Pu h g i j k Q1 Q3 Qe Q4 Q2 Quantity of agricultural products (tons) ...read more.


The government now receives tariff revenue. The main American problem with this tariff is that at the time of economic recession to impose tariff does not help in the American recovering. During the recession the countries tries to shift the aggregate demand to the right. The existing recession is a special one in the history of the recessions. It is a worldwide one and it involves credit crunch at the same time. Now I am going explain why the Americans are so against this tariff, and why the Mexican government imposed it. Figure 2: the governments needs shift the aggregate demand Price AS AD2 AD1 GDP The aggregate demand is built up by the consumption, investment, government spending, net export. To recover from the recession, the government needs to shift the demand curve the right. ...read more.


less revenue to domestic producers, the tariff makes domestic more competitive and they receive more revenue at the price with the tariff. Furthermore the government could receive significant amount of money from the imposed tariff and with the tariff the import rate decreases what makes the balance of payments better. The further outcomes of the tariff could be: after the tariff Q1Q3 are now produced by relatively inefficient producers, as opposed to more efficient foreign producers. The foreign producers would produce this quantity for a minimum revenue h while domestic producers need a minimum revenue h+c. Thus c represents the inefficiency of the domestic producers there it a deadweight loss. Finally it is a controversial situation, to protect the industries and own employment or support world economic recovery. Word count: 741 1 A tariff is a tax that is charged on imported goods. ?? ?? ?? ?? Adam Szakal Economics Commentary 06.11.2009 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Economics essays

  1. US Tariff On Solar Panels

    As a result, some of the Chinese manufacturers are "planning to move final assembly of solar modules to plants in the United States". By moving the final assembly of solar panels into their subsidiary plants in the USA, the Chinese manufacturers are not actually importing any finished product of the

  2. IB Macroeconomics Commentary

    Furthermore, unemployment leads to decreased expenditure as residents are unwilling to spend whatever is left of their disposable income. As a result, the government will collect less revenue from sales tax. The workers that lost their jobs in sectors related to real estate will eventually get their jobs back once the economy experiences higher levels of economic activity.

  1. IB SL Economics Commentary: Macroeconomics

    Raising the amount of reserve requirement is an interesting contractionary choice, so is raising the discount rate charged to major banks. These two together act to reduce the greatest inflationary obstacle, that is public opinion. Thus, as shown in Fig2, an increase in the interest rate results in a decrease in consumer demand for money.

  2. Growth and Development Problem Set - IB Economics exam questions and answers.

    An externality can be either positive or negative. (Example: pollution emitted by a factory). Sustainable development focuses on four main objectives: (1) social progress, (2) effective protection of the environment, (3) prudent use of natural resources, (4) maintenance of high and stable levels of economic growth and employment.

  1. Economics Extended Essay - To what extent has the market for paintings in South ...

    This proves that the art funds have reduced the amount of money that they are willing to invest in contemporary art. In fact, they have only started investing in art again. The manager of one of the galleries that filled in my questionnaire stated that between the periods of November 2008 and January 2009 very few speculators actually bought paintings.

  2. Practice coursework

    As they do this, the productivity drops to zero in those countries, and there is a high chance of the companies losing contact with their oil.

  1. Macro Economics Notes

    In fact they do the opposite. If an economy can increase its AS then it can even raise AD (through fiscal and monetary policy) without causing inflation. Multiplier The multiple by which an increase in government spending leads to a more than proportional rise in AD.

  2. 15 Historical Economic Questions on Mercatilism and the Development of European Countries.

    The amount of money paid to the proletariat that created this product remains unaffected by the price charged for the product. This difference in prices charges and wages paid were the ?surplus value? or ?profits? that were made strictly by the bourgeoisie class and were seen as a major contradiction of capitalism.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work