The Argentine government has recently been imposing heavy trade restrictions. Taxes on exports are a major source of rev
Posted: Thu May 05, 2022 7:07 am
The Argentine government has recently been imposing heavy trade
restrictions. Taxes on exports are a major source of revenue for
the country. Being a part of the Mercosur customs union, the
country cannot independently impose import tariffs but has found
other ways to restrict imports. The idea behind this is to “supply
the growing domestic market with local labor and production.” As a
result of these restrictions, the markets for various products
have been affected. With BlackBerrys in short supply within
Argentina and no possibility of imports, a multinational
manufacturer is in fact assembling them in the country's province
of Tierra del Fuego, off the coast of South America. The cost thus
incurred is estimated to be 15 times higher than what it costs to
produce BlackBerrys in Asia.
Which of the following, if true, would suggest that these
import restrictions will not have the intended effect on
Argentina's domestic production?
A. The common external tariffs imposed by Mercosur nations are
very high. B. Inflation in the price of food items in Argentina is
low. C. Prior to the import restrictions, growth in domestic
production in Argentina was low. D. Industrial workers in Argentina
are known to have higher productivity than most other member
countries of Mercosur. E. Inability to import components has
increased the cost of production of finished goods in Argentina
substantially
restrictions. Taxes on exports are a major source of revenue for
the country. Being a part of the Mercosur customs union, the
country cannot independently impose import tariffs but has found
other ways to restrict imports. The idea behind this is to “supply
the growing domestic market with local labor and production.” As a
result of these restrictions, the markets for various products
have been affected. With BlackBerrys in short supply within
Argentina and no possibility of imports, a multinational
manufacturer is in fact assembling them in the country's province
of Tierra del Fuego, off the coast of South America. The cost thus
incurred is estimated to be 15 times higher than what it costs to
produce BlackBerrys in Asia.
Which of the following, if true, would suggest that these
import restrictions will not have the intended effect on
Argentina's domestic production?
A. The common external tariffs imposed by Mercosur nations are
very high. B. Inflation in the price of food items in Argentina is
low. C. Prior to the import restrictions, growth in domestic
production in Argentina was low. D. Industrial workers in Argentina
are known to have higher productivity than most other member
countries of Mercosur. E. Inability to import components has
increased the cost of production of finished goods in Argentina
substantially