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A) The parliament of Ghana is debating whether import substitution should take the form of quotas or tariffs. You are asked to brief them on the difference between the two. A representative from Ghana's National Labour Party is particularly worried about consumers? Which policy (tariffs or quotas) is better for consumers?
B) The president of Ghana is proposing increasing tariffs on rice and providing local rice producers with a subsidy. Explain to parliament the welfare implications of this from the perspective of consumers, producers and the government. Use diagrams to help your explanation.
Details:
-About half of Ghana's population depends on agriculture, but Ghana still imports some of its food.
-The majority of Ghana's people live in rural areas and exist on a subsistence way of life.
-Ghana has one of the highest rates of income inequality in the world.
-Nearly half of the population is employed in agricultureYou are told that the new government is interested in moving away from agriculture and into manufacturing. To do so, the government wants to pursuit a policy of import substitution industrialization (ISI).
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