Suppose you are an economist advising the Canadian government as to whether to erect trade barriers for the protection of Canada's textile industry. You would study the gains to be realized in this industry and weigh those against

Question

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Erecting trade barriers for the protection of Canada's textile industry may result in lowered real incomes to Canadian consumers. Trade barriers such as tariffs or quotas on imported textiles will increase the cost of imported textiles and thus push up the prices of domestically produced textiles. This will increase the revenues of the domestic textile industry, but it will also lead to higher prices for consumers who buy textiles. Lowered real incomes are a cost in terms of reduced purchasing power and reduced standards of living for Canadians. Therefore, the gains to be realized in the textile industry should be weighed against the cost in terms of lower real incomes to Canadian consumers.

Suppose You Are an Economist Advising the Canadian Government as to Whether