The Argument That Foreign Trade Should Be Restricted to Protect

question 86

Multiple Choice

The argument that foreign trade should be restricted to protect domestic employment and output is based on the idea that:

• A) consumers are willing to pay higher prices for domestic goods.
• B) producers will not exploit reduced foreign competition by charging higher prices.
• C) foreign companies are more costly to deal with than domestic companies.
• D) sales of imports come at the expense of domestic goods and jobs.

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Definitions:

Consumer Protection Act

A law designed to safeguard consumers from unfair, deceptive, or predatory business practices and to ensure fair trade competition.

TED Spread

The difference between the interest rates on short-term US government debt and interbank loans, indicating credit risk in the general economy.

LIBOR

The London Interbank Offered Rate, representing the interest rate banks charge each other for short-term loans.

Treasury-Bill Rate

The yield or interest rate on U.S. government short-term debt instruments, such as treasury bills, which are considered among the safest investments.