The Argument That Import Restrictions Save Jobs and Promote Prosperity

question 125

Multiple Choice

The argument that import restrictions save jobs and promote prosperity fails to recognize that:

• A) there are no secondary effects of import restrictions.
• B) import restrictions will lower prices in the protected industries.
• C) import restrictions cannot create jobs in any industries.
• D) U.S. imports provide people in other countries with the dollars power required for the purchase of U.S. exports.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Inventory

The total amount of goods and materials held by a company intended for sale in the ordinary course of business.

Incremental Cash Flows

The additional cash inflows or outflows expected from a new project or investment, crucial for determining its net present value.

Capital Budgeting

The process of planning and managing a company's long-term investments in projects and assets, to maximize returns and shareholder value.