Suppose All Countries Try to Expand Their Exports and Restrict

question 66

Multiple Choice

Suppose all countries try to expand their exports and restrict their imports through the use of export subsidies and import tariffs.The net effect will probably be

• A)a fall in the volume of trade and an increase in the standard of living in each country.
• B)a fall in the volume of trade and a decline in the average living standards in each country.
• C)an increase in the volume of trade but little change in unemployment levels.
• D)no change in the volume of trade but an increase in the overall unemployment rates.
• E)no change in the volume of trade but less unemployment.

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Definitions:

Proxy

An authority to act on behalf of another person in voting at shareholder meetings or making other decisions.