What Is One of the Major Shortcomings of Using Tariffs

question 105

Multiple Choice

What is one of the major shortcomings of using tariffs or quotas to "save American jobs"?

• A)Trade barriers protect the development of new technology, but the new technology eliminates jobs.
• B)Import restrictions alter the composition of domestic employment, but they have minimal effect on the overall level of domestic employment.
• C)The volume of trade with other nations is limited to a few industries, so trade restrictions would not increase national employment.
• D)Major American firms have produced many products in other countries and would not hire more domestic labor when trade barriers are imposed.

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Definitions:

Capital Projects

Large-scale investments undertaken by a firm to maintain or expand its business operations.

Earnings Per Share

A portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.

Reverse Stock Splits

A corporate action in which a company reduces the number of its existing shares to increase the share price without changing the company's market capitalization.

Cash Dividends

Distributions of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders in the form of cash.