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Econ 561 international trade
Trade Policy
6
Economics
Undergraduate 4
05/15/2013

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Cards

Term
Hong Kongs Economics
Definition
Legally a part of china, but economically seperate. They are the only modern economy with no tariffs or import quotas
Term
Economies of scale:
Definition
For free trade. Restrictions limit this. Too much protection incentivize too many firms to enter the industry artificially
Term
Incentives for Entreprenuers
Definition
free trade allows them to seek new ways to learn and innovate
Term
More productive firms engage in exporting
Definition
this implies that with free trade the economy as a whole will be more efficient by shifting the industrial mix to more productive firms
Term
When imports are restricted with a quota instead of a tariff
Definition

Rent seeking occurs and the cost is sometimes magnified, individuals and companies incur costs trying to obtain these license

Creates incentive to overinvest

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