Business Finance
ECO 204 - Ashford

Question Description

DQ1 Why would cash transfers typically be preferred by recipients over in-kind transfers? What are the pros and cons of each from a government perspective DQ2 Who gains and who loses from a tariff? How do the effects of tariffs differ from the effects of quotas? If you were a small country, what would you rather utilize?

Final Answer

1= In general, people will prefer to get cash transfers from the government rather than in-kind transfers because these transfers give them more power and autonomy. They come with fewer “strings” attached and are therefore more useful in tangible ways. It is also more dignified, in a sense, to get money rather than in-kind transfers.

If a government provides cash transfers, as with a welfare system, the recipients have much more freedom and flexibility than they would have if the transfers were in-kind. For example, let us say that the government gave a poor family a chunk of money rather than food stamps. The family could, potentially, spend the money wisely on food and thereby have some savings left over to use for other purposes. By contrast, an in-kind transfer would require them to use all of their benefit on food, giving them very little flexibility.

If we are talking about true in-kind transfers, such as bags of flour and cans of meat, the same applies, only more so. With a cash transfer, the family can choose what they want to buy. With the in-kind transfers, the family has to use whatever they are given. This gives them much less choice and flexibility and is therefore less useful and also perhaps demeaning to some degree.
2=No bills, no co-pays, no deductibles;
No exclusions for pre-existing conditions; you are insured from the day you are born;
No bankruptcies due to medical bills;
No deaths due to lack of health insurance;
Cheaper. Simpler. More affordable;
Everybody in. Nobody out;
Save taxpayers billions a year in bloated corporate administrative and executive compensation costs.
Other important positives of government-funded healthcare include:
47 millions Americans lacked healthcare insurance coverage as of the 2008 presidential campaign season. Soaring unemployment since then have caused the the ranks of the uninsured to swell past 50 million in mid-2009.
Mercifully, government-funded healthcare would provide access to medical services for all uninsured. And lower costs of government healthcare will cause insurance coverage to be significantly more accessible to millions of individuals and businesses.

Doctors and other medical professionals can focus on patient care, and no longer need to spend hundreds of wasted hours annually dealing with insurance companies.
Patients, too, under government healthcare would never need to fritter inordinate amounts of frustrating time haggling with insurance companies.
3=ts a draw, assuming fair trade and not dumping. Importing country protects jobs, tax revenues and economic base, consumers lose lower prices. if the economy tanks because cheap exports destroy the economy and unemployment skyrockets to 12% how is that a good thing for consumers who save a dollar?

Exporting country faces possible slow down in economy, lowers domestic prices and sells more at home. Or stops predatory export policy assuming it is dumping goods by selling them at a loss to kill international competition.

4= Here is the economic difference between a tariff and a quota. A tariff is a tax imposed by the government on imports coming onto a country. This tax is ultimately passed on to consumers in the form of higher prices. A quota on the other hand, sets a limit on how much of a product can be imported into a country. This helps to protect producers of domestic products from facing too much competition. Both tariffs and quotas are a way for a country to protect itself from foreign competition and increase consumption of domestic goods.
5= the U.S. government puts a 20% tariffs on imported Indian cricket bats they will collect $10 million dollars if $50 million worth of Indian cricket bats are imported in a year. That may sound like small change for a government, but given the millions of different goods which are imported into a country, the numbers start to add up. The Progressive Policy Institute has found that the United States collects 20 billion dollars a year in tariff revenue. This is revenue that would be lost to the government unless their import quota system charged a liscencing fee on importers. Which brings me to point 2.

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University of Maryland

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