Who do you think will be in favor of this proposal

Reference no: EM133278160

Question - Suppose capital in the U.S. auto industry is immobile for at least a five-year period, but agricultural capital can adjust in as few as six months. Also suppose the U.S. trades with Mexico and is capital abundant relative to less-skilled labor, which is used in both of these industries. (Hint: both industries are import-competing). Now, if there is a proposal for tariff reductions (i.e. freer trade) over the next 3 years, who do you think will be in favor of this proposal and who will oppose it? List each relevant party (factor) and briefly explain why they will be for or against (or neutral to) the proposal.

Reference no: EM133278160

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