Tariffs can never raise a country's standard of living. True or ...

[torybrooks]

Tariffs can never raise a country's standard of living. True or false? Explain carefully.
 
  What will be an ideal response?

Question 2

What have we assumed when we conclude that a real depreciation of the currency improves the current account?
 
  A) The volume effect outweighs the value effect.
  B) The value effect outweighs the volume effect.
  C) All else equal and the volume effect outweighs the value effect.
  D) All else equal and the value effect outweighs the volume effect.
  E) All else equal and the volume effect equals the value effect.

[lindahyatt42]

Answer to Question 1

This statement is true for a small country and can be illustrated using standard welfare analysis. It is false for large countries as is illustrated in Figure 6.9 and Table 6.5 in the text.

Answer to Question 2

C

[torybrooks]

Thanks for the timely response, appreciate it

[milbourne11]

Excellent