Economists Are Generally Opposed to Tariffs or Other Restrictions on Imported

question 159

Multiple Choice

Economists are generally opposed to tariffs or other restrictions on imported goods because of the negative secondary effects they create that more than offset the benefits to employment in the domestic industry. Which of the following could be considered a secondary effect of these trade restrictions?

• A) The price to consumers of the good in question will be higher as a result of the restriction, meaning consumers will be worse off.
• B) As consumers must spend more money to purchase the good, there will be employment losses in other domestic industries as consumers cut back on their spending on other things.
• C) Because there is a link between a country's imports and its exports, less imports from other countries will result in lower domestic employment in export industries.
• D) All of the above.

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Definitions:

Risk Aversion

The tendency of individuals to prefer outcomes that are certain or less risky over outcomes that are uncertain, even if the uncertain outcomes might offer a greater expected return.

Income

The money received, especially on a regular basis, for work or through investments.

Fair Insurance Policy

An insurance contract that is considered equitable, offering reasonable terms, coverage, and protection for all parties involved.

Premium

The amount paid for an insurance policy or the difference above the nominal or face value of a security.