Why Do Nations Impose Trade Barriers, Such as Those Instituted

question 128

Multiple Choice

Why do nations impose trade barriers, such as those instituted during the Great Depression, that make it difficult for their own citizens to trade with people in other countries?

• A) Trade restrictions are a good way for a country to increase the total employment and income level of its citizens.
• B) As the experience during the 1930s illustrates, trade restrictions are an effective way to increase exports and tax revenues.
• C) Trade restrictions provide gains to domestic residents at the expense of foreigners.
• D) Trade restrictions often provide benefits to highly visible special interest groups while imposing a less visible cost on the general populace.

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Definitions:

Standard Direct Labor Cost

The predefined cost associated with the labor required to produce a good or service, under normal circumstances.

Payroll Taxes

Levies placed on both employers and employees, often determined as a portion of the wages that businesses provide to their workforce.

Hourly Wage Rate

The amount of money paid for each hour of work, commonly used to compensate hourly employees.

Labor Variances

Differences between the actual labor costs incurred and the standard labor costs expected for the work performed.