Which of the Following Policy Objectives Can Sometimes Lead a Government

question 71

Multiple Choice

Which of the following policy objectives can sometimes lead a government of a small economy to rationally oppose free trade?

• A)to protect against low- wage labour from abroad
• B)to raise average living standards
• C)to maximize national income
• D)to diversify production in the domestic economy
• E)to prevent domestic currency from going abroad

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Definitions:

Tax Rate

A tax rate is the percentage at which an individual or corporation is taxed on their income or profits.

Degree of Operating Leverage

A financial metric that measures the sensitivity of a company's operating income to its sales.

Variable Cost

Costs that vary directly with the level of production or business activity, such as materials and labor.