Retaliation of Trade Restrictions Can

question 53

Multiple Choice

Retaliation of trade restrictions can:

• A)set off still greater trade restrictions,leading to an outright trade war.
• B)recover the surplus lost during the period of trade barriers.
• C)decrease rent-seeking activities in the economy.
• D)increase the potential gains from trade through specialization.
• E)lead to phasing out of tariffs and quotas.

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Definitions:

Obligation

A duty or commitment to pay money or perform some action in the future, often legally enforceable.

Present Value

Present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Excavation

The process of removing soil, rock, or other materials from a site to form an open hole or cavity.