A Possible Reason to Impose a Protectionist Policy Such as a Tariff

question 99

Multiple Choice

A possible reason to impose a protectionist policy such as a tariff is to

• A) increase the welfare of domestic consumers.
• B) slow domestic production.
• C) aid other nations in developing their own industries.
• D) protect domestic workers from foreign competition.

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Definitions:

Bank Vaults

Secure rooms where banks and other financial institutions store money, valuable documents, and other assets.

Fed

Short for the Federal Reserve, the central banking system of the United States, which regulates the U.S. monetary and financial system.

Open Market

An economic system with no barriers to free market activities, where securities, goods, and services can be traded openly.

Excess Reserves

The amount of reserves that a bank holds beyond the minimum required by regulation or central bank policy, which can be loaned out to generate profit.