Asked by IBRAKHIM KATCHIEV on Jun 20, 2024
Verified
Which of the following statements is correct? Most economists
A) think that protectionism is a vital and necessary component in a nation's economic policy.
B) prefer to let the market forces of supply and demand solve trade imbalances.
C) believe that tariffs and quotas are efficient and effective measures.
D) believe product standards,export subsidies,and exchange controls are desirable trade practices,but quotas and tariffs only provoke retaliation.
E) think that the best way to correct trade deficits is to devalue the dollar.
Protectionism
A government policy to protect domestic industries and producers by restricting international trade, often through tariffs and quotas.
Trade Imbalances
A situation where there is an unequal value of imports and exports between two countries, leading to a surplus or deficit in trade relationships.
Tariffs
Taxes imposed on imported goods and services, often used to protect domestic industries from foreign competition.
- Analyze the reasons economists prefer free trade over protectionist policies.
Verified Answer
FM
Florence muthoniJun 22, 2024
Final Answer :
B
Explanation :
The majority of economists believe in free trade and prefer to let the market forces of supply and demand determine trade imbalances. They believe that protectionist measures like tariffs and quotas can create inefficiencies and may provoke retaliation from other countries.
Learning Objectives
- Analyze the reasons economists prefer free trade over protectionist policies.