If All Countries Try to Expand Their Exports and Restrict

question 49

Multiple Choice

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

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Definitions:

Economics

The efficient allocation of the scarce means of production toward the satisfaction of human wants.

Input

Resources used in the production process, including labor, materials, machinery, and other factors of production.

Demand

The volume of goods or services that individuals are prepared and financially able to acquire at varying price points during a certain time span.

Perfectly Competitive Labor Market

A theoretical market where numerous employers and employees interact, with no single entity able to influence wages or working conditions.