Protectionist Policies Implemented in a Small Open Economy with a Trade

question 48

Multiple Choice

Protectionist policies implemented in a small open economy with a trade deficit have the effect of ______ the trade deficit and ______ the quantity of imports and exports.

• A) decreasing; decreasing
• B) not changing; decreasing
• C) decreasing; not changing
• D) not changing; not changing

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Definitions:

Ideal Standards

Standards that can be achieved only under perfect operating conditions, such as no idle time, no machine breakdowns, and no materials spoilage; also called theoretical standards.

Machine Breakdowns

Refers to the unexpected failures or malfunctions of machinery that disrupt the production process or operations.

Materials Spoilage

The portion of raw materials that becomes unusable and is discarded during the production process.

Direct Labor

Labor costs directly attributed to the production of goods or services, such as wages paid to factory workers or assembly line employees.