Principles of Macroeconomics / Unit 17 MAC 1620 short lesson, about 20 seconds
Protection Works Like a Subsidy
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The idea
Protection raises the domestic price, so consumers pay more and domestic producers receive more. It works like a subsidy from consumers to producers, collected through prices rather than through taxes.
In practice
Consumers lose more than producers gain, so the total falls.
Where people slip
The anchor concedes this is not really disputed: if protection did not raise producers' receipts, nobody would seek it.
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