Which of the Following Statements About Economists' Assessment of Protectionism

question 1

Multiple Choice

Which of the following statements about economists' assessment of protectionism is true?

• A) The costs and benefits of trade barriers are essentially equal.
• B) The benefits of trade restrictions exceed their cost.
• C) The costs of trade barriers exceed their benefits and generally result in inefficiency.
• D) It is not possible to estimate the costs of protection.

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Definitions:

Equilibrium Interest Rate

The interest rate at which the demand for funds equals the supply of funds, balancing savings and investments in an economy.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity supplied.

Loanable Funds

The money available in the banking system for lending to businesses or consumers, influenced by interest rates and monetary policy.

Demand for Loanable Funds

The Demand for Loanable Funds represents the relationship between the interest rate and the total amount of loans that borrowers are willing to take at that rate.