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Trade barriers hinder the flow of goods and services from "summary" of International Economics by Robert Carbaugh
Trade barriers, such as tariffs and quotas, can significantly impede the movement of goods and services across borders. These barriers are put in place by governments to protect domestic industries from foreign competition. However, while they may benefit a specific industry in the short term, they can ultimately harm the overall economy by limiting consumer choices and increasing prices. Tariffs, which are taxes on imported goods, raise the cost of these goods for consumers. This can lead to decreased consumption and lower overall welfare for a country. Additionally, tariffs can spark retaliation from trading partners, leading to a trade war that further restricts the flow of goods and services. Quotas, on the other hand, limit the quantity of a specific good that can be imported. Thi...
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