Problems & Exercises for MACRO

Unit Four (for the Final Exam)

Unit Four--Assignment Two--Web Problem 3

1

Suppose the U.S. imposes a 20% tariff on softwood lumber shipped from Canada to the U.S. Who benefits and who loses from this action? Be specific in your answer.

Suppose Canada then retaliates by imposing a 20% tariff on feed corn shipped from the U.S. to Canada. Who gains and who loses from this action?

Please send your responses by e-mail.