jnu sis

[faizy]

what is d optimal trade policy for a country?
a)subsidized
b)free trade
c)restrictions with tariff.
d)can't say

Amit sir ....please tell me the ans? please..................

[ritu]

it shud be 'cant say"

[Abu]

Yes, it is can't say. If it was any of other options ,all the countries in the world will be following that ;)

[Amit Goyal]

you have the answer already :-)

[Sajal]

Sir shouldn't the answer to this q be free trade..IN ch 9 mankiw, international trade it is clearly shown that when a country opens itself to trade the total surplus wud be greater then in the absence of it and when a country applies any restrictions like an import tariff or a quota then it wud result in the loss of total surplus..which means the best policy shud be free trade for a country..

[aditi5000]

Yes I thought the same thing but in case you are a large country like USA (which effects the entire world), a policy of tariffs (ie not free trade) actually helps you (other things constant) .. Check out Krugman's International Economics textbook

[Chinni18]

Yes. In fact imposition of a tarriff by a large country can lead to improvement of overall welfare whereas it is not the case for small countries. There is no single rule that would fit all nations. So "can't say"