The Ricardian Model of International Trade Demonstrates That Trade Can

question 55

Multiple Choice

The Ricardian model of international trade demonstrates that trade can be mutually beneficial. Why, then, do governments restrict imports of some goods?

• A) Import restrictions are the result of trade wars between hostile countries.
• B) Trade can have significant harmful effects on some segments of a country's economy.
• C) Restrictions on imports can have significant beneficial effects on domestic consumers.
• D) The Ricardian model is often incorrect in its prediction that trade can be mutually beneficial.
• E) Imports are only restricted when foreign-made goods do not meet domestic standards of quality.

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Definitions:

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Retinal disparity is the slight difference in the visual images that reach each eye, enabling depth perception in the brain.

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A chronic medical condition characterized by consistently elevated blood pressure in the arteries.