What are the rationales for protectionist policies? What will ...

[james]

What are the rationales for protectionist policies?
 
  What will be an ideal response?

Question 2

Describe the channels through which an open market sale of bonds by the Fed affects output in a closed economy.
 
  What will be an ideal response?

[kescobar@64]

Answer to Question 1

The rationales for protectionist policies are to shield workers from foreign competition, to nurture infant industries, and to help domestic firms establish monopolies in world markets.

Answer to Question 2

An open market sale of bonds leads to a leftward shift in the money supply. As a result, interest rates increase, which in turn reduce investment. The lower levels of investment translate into lower output levels.

[james]

Thank you

[kescobar@64]

Happy to help you