In the Case of Declining Industries,wage Subsidies or Special Tax

question 41

Multiple Choice

In the case of declining industries,wage subsidies or special tax breaks that decline over time:

• A)can be more efficient than tariffs.
• B)are permanent import restrictions.
• C)can result in increasing shocks in the economy.
• D)equal or exceed the direct welfare loss from tariffs.
• E)result from diseconomies of scale.

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Definitions:

Reciprocity

The social norm that suggests people should return help, not harm, to those who have behaved kindly towards them.

Foot-In-The-Door Technique

A persuasion strategy that involves getting someone to agree to a small request in order to increase the likelihood of agreeing to a larger request later.

Door-In-The-Face Technique

A persuasion strategy where a large, unreasonable request is first made knowing it will be refused so that a smaller, more moderate request will be accepted.

Sleeper Effect Method

A phenomenon where a message that was initially discounted gains in persuasiveness over time, often due to the dissociation of the message from its source.