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Figure 9-F Prior to the Year 2000, the United States Considered Renewal

Question 185

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Figure 9-F
Prior to the year 2000, the United States considered renewal of Most Favored Nation (MFN) trading status with China annually (Most Favored Nation trading status is now called Normal Trade Relations) . Historically, legislators made threats of not renewing MFN status because of alleged human rights abuses in China. The nonrenewable of MFN trading status would likely have triggered retaliatory measures by China. The game below reflects the potential economic gains from trade in a scenario in which China chooses whether to impose trade sanctions against U. S. firms and the United States chooses whether to renew MFN status with China.
Figure 9-F Prior to the year 2000, the United States considered renewal of Most Favored Nation (MFN) trading status with China annually (Most Favored Nation trading status is now called Normal Trade Relations) . Historically, legislators made threats of not renewing MFN status because of alleged human rights abuses in China. The nonrenewable of MFN trading status would likely have triggered retaliatory measures by China. The game below reflects the potential economic gains from trade in a scenario in which China chooses whether to impose trade sanctions against U. S. firms and the United States chooses whether to renew MFN status with China. -Refer to Figure 9-F.When this game reaches a Nash equilibrium, the gains from trade will be: A) United States $140; China $5. B) United States $65; China $75. C) United States $35; China $285. D) United States $130; China $275.
-Refer to Figure 9-F.When this game reaches a Nash equilibrium, the gains from trade will be:


A) United States $140; China $5.
B) United States $65; China $75.
C) United States $35; China $285.
D) United States $130; China $275.

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