Which of the Following Is a Valid Counterargument Against Using

question 65

Multiple Choice

Which of the following is a valid counterargument against using tariffs to protect high wages from cheap foreign labor?

• A) The benefits of such a tariff policy will go to consumers, not workers.
• B) The benefits of such a tariff policy will go to businesses, not workers.
• C) Wage rates in a nation are largely determined by productivity, not trade tariffs.
• D) The economy may become overheated, thus increasing inflation.

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Definitions:

Labor Productivity

An indicator of economic efficiency that evaluates the quantity of goods and services produced (output) relative to the total hours spent in producing those goods and services.

Complementary Resources

Resources used together in production that increase each other's effectiveness.

Fixed Proportions

A production condition where inputs must be combined in strict, unchanging ratios to produce output.

Substitution Effect

The change in the quantity demanded of a good resulting from a change in its price, making it more or less expensive relative to other goods.