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    reasons of trade restrictions

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    Your boss in the U.S. home office wants to know your perspective on the following. How do international sanctions, tariffs, quotas, and trade restrictions affect international trade and costs of production? How do tariffs and sanctions on the import of auto engines into the U.S. affect production and costs at Acme? Do you agree with trade restrictions? When do you think they are successful? Why or why not?

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    Solution Preview

    All these are measures to regulate cross border transactions. These are the ways to promote or restrict the import or export from one country to other country or countries. Let us understand one by one. Quota is a restriction by one country on the other countries of imports. This restriction is in nature of quantity. For eg if USA imposes restriction on India on the imports from Indian auto engines of not more than one lakh engines per year. Its a quota, as India cannot export more than one lakh t-shirt to USA. Thus it can affect the Acme's cost of production as ...

    Solution Summary

    This job examines various reasons of trade restrictions.