A Possible Reason a Nation Might Impose a Restrictive Policy

question 82

Multiple Choice

A possible reason a nation might impose a restrictive policy such as a tariff is to

• A) help domestic firms increase market share relative to their foreign competition.
• B) increase the welfare of domestic consumers.
• C) increase the level of imports.
• D) encourage specialization in the good in which the nation has a comparative advantage.
• E) give consumers more foreign-made options.

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Definitions:

Maintenance Margin

The minimum amount of equity that must be maintained in a margin account after a purchase has been made, to continue holding the position.

Initial Margin

The percentage of the purchase price of securities (that can be bought on margin) that the investor must pay with his/her own cash or marginal securities.

Federal Reserve System

The central banking system of the United States, responsible for monetary policy, regulating banks, and ensuring financial system stability.