What Is One of the Major Shortcomings of Using Tariffs

question 233

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:

Unused Capacity

Represents the available production or service facility capability that is not being utilized to its full potential.

Condensed Income Statement

A simplified financial statement that highlights a company's revenues, expenses, and profits over a specific period, omitting detailed line items.

Discontinuance

This term refers to the cessation of operations or activities in a specific business segment or location.

Sunk Cost

A cost that has already been incurred and cannot be recovered.