"A Tariff Should Be Imposed on Chinese Shirts Because They

question 185

Multiple Choice

"A tariff should be imposed on Chinese shirts because they are being sold in the United States below their cost of production." Which argument for trade barriers is used in this example?

• A) low foreign wages
• B) infant industry
• C) antidumping
• D) national defense

---

Definitions:

Disposable Income

Net resources for spending and saving available to households after subtracting income taxes.

MPC

MPC, or Marginal Propensity to Consume, is the proportion of additional income that an individual spends on consumption.

APC

Average Propensity to Consume, the fraction of income that households spend on consumption as opposed to saving.

MPS

An acronym that can stand for multiple financial and economic terms, such as Marginal Propensity to Save, which indicates the fraction of additional income that a household saves.