The Efficiency Case Made for Free Trade Is That as Trade

question 31

Multiple Choice

The efficiency case made for free trade is that as trade distortions such as tariffs are dismantled and removed

• A) government tariff revenue will decrease, and therefore national economic welfare will decrease.
• B) government tariff revenue will decrease, and therefore national economic welfare will increase.
• C) deadweight losses for producers and consumers will decrease, hence increasing national economic welfare.
• D) deadweight losses for producers and consumers will decrease, hence decreasing national economic welfare.
• E) government tariff revenue will increase, hence increasing national economic welfare.

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Definitions:

Deposit

An upfront payment or security placed in trust or as a guarantee for the fulfillment of an obligation or purchase.

Majority

More than half of a particular group or amount; often referring to the greater part of a specific population or quantity.

Repudiated

Refers to the rejection or denial of a claim or contract.

Binding

Describes an agreement, contract, or decision that is legally enforceable, requiring parties involved to adhere to the terms set forth.