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| Refer to the prices of Japanese automobile imports under the VER (Figures 9-5) and answer the following: a. What component of the price of imported automobiles from Japan rose the most during the period 1980 to 1985? b. Sketch how Figures 9-5 and 9-6 might have looked if the U.S. had applied a tariff to Japanese auto imports instead of the VER (with the same level of imports). In words, discuss how the import prices and U.S. prices might have compared under a tariff and the VER. c. Which policy-a tariff or the VER-would have been least costly to U.S. consumers? |
