A Possible Reason a Nation Might Impose a Restrictive Policy

question 82

Multiple Choice

A possible reason a nation might impose a restrictive policy such as a tariff is to

• A) help domestic firms increase market share relative to their foreign competition.
• B) increase the welfare of domestic consumers.
• C) increase the level of imports.
• D) encourage specialization in the good in which the nation has a comparative advantage.
• E) give consumers more foreign-made options.

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Definitions:

Capacity Utilization Rate

A metric used to measure the rate at which potential output levels are being met or used.

Interest Rate

The percentage at which interest is charged or paid on amounts of money, reflecting the price of credit or returns on investment.

Personal Property

Movable property that is not attached to real estate, including vehicles, furniture, and personal belongings.

U.S. Government Bonds

Debt securities issued by the United States Department of the Treasury to fund federal government operations and obligations, considered low-risk investments.