pqhai
targetgmatchotu
Can some expert pour in and explain please.
I am unable to get the stimulus itself,answering it is another step.
Plz Advise!
Rgds,
TGC !!
Hi TGC,
First of all, we need to understand
the logic of quotas. The reason for setting import quotas is to protect internal industries from competition of foreign competitors.
There are two cases:
(1)
No quotas: Internal industries will have difficulties because foreign competitors can sell products without any restrictions.
(2)
Have quotas: Internal industries will NOT have difficulties because there are some limitations for foreign competitors.
This is resolve the paradox question, so
what is paradox here? The paradox is:
If there are import quotas, Machine Tool Industry (MTI) should be protected and will grow. But why MTI still maintains that the import quotas policies do not help?The reason is:
Machine Tool Industry products = Defense products + Other products.
MTI will have difficulties if (1) Sales of Defense products decline
(2) Sales of Other products decline
(3) Sale of both Defense products and Other products decline
In this question, MTI asks for help because
the industry's sales of other products account for bigger portion of the industry's sales. BUT this segment does not have protection from government ==> MTI industry cannot grow ==> It will affect the ability of the United States to wage a prolonged war.
C says exactly the same reason. Hence, it is correct.
Hope my post helps you.
Hi
Hi
chiranjeev,
Could you help me on validating my argument.
Dense Department analysts worry that the ability of the United States to wage a prolonged war would be seriously endangered if the machine-tool manufacturing base shrinks
further. ( So Defense analyst (worry) predict that ability of US to wage long term war would be at risk if certain industries base shrinks further. A point to not here is the highlighted portion . Th industry is already growing small. Any further decrease from this point is a serous concern for Deference analyst)
Now to understand the argument further we need to understand the structure of the sentence . Before X, Y.
So Y happens first and then X happens.
X is : Before the Defense Department publicly connected this security issue with the import quota issue,
So defense dept connected this issue( ability of US to wage prolonged war at risk because of shrinking base of MTI) with import quota issue. ( that means currently there are not enough taxes levied or no taxes on the import of certain industry products )
and Y is : the machine-tool industry raised the national security issue in its petition for import quotas
So the machine tool industries do want tariffs to be applied on imports of certain products ( may be machine tools)
and reasoned a national security issue to support the claim.
All in all the Defense dept and the small tool industry association are for import tariffs on machine toll industry products)
Many posts i have seen above are telling this is a paradox question. There is no paradox in the argument above. Both are for tariffs on imports . One reasons defense security angle and other reasons national security. Aren't both same.
Is national security not a defense security
Which of the following, if true, contributes most to an explanation of the machine-tool industrys raising the issue above regarding national security?
Question asked to us is which of the following would help most ( maximum) in explaining why MTI rose the import quota issue regarding national security.
Where did i miss to understand the paradox. And what is the paradox in above argument. ( the post of @pqhai) mentions it as paradox, but i beg to disagree with him.
Requesting your valuable input
Thanks
Probus