If Adjustment Costs Associated with Removing Trade Restrictions Are High

question 35

Multiple Choice

If adjustment costs associated with removing trade restrictions are high, then

• A)consumers will end up worse off because government payments to workers who lost their jobs will increase.
• B)the benefits of free trade can be used to compensate workers who lost their jobs.
• C)the benefits of free trade will be negative.
• D)there are no benefits of free trade.
• E)None of these

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Definitions:

Malthus

Refers to Thomas Robert Malthus, an English economist and demographer known for his theories on population growth and its impacts on resources.

European Development

The process of economic, social, and political change and growth in European countries, often involving integration, innovation, and the handling of challenges such as migration and regional disparities.

One-child Policy

A birth control policy formerly implemented by China, aimed at controlling the population by limiting families to having only one child.

Spiralling Population

A scenario where a population grows rapidly due to a combination of high birth rates and lower mortality rates, often resulting in increased stress on resources and infrastructure.