Many American and European Politicians Argue That Limiting International Trade

question 171

Multiple Choice

Many American and European politicians argue that limiting international trade will improve GDP. A reason such protectionism is likely to fail is

• A)such policies will reduce exports by as much or more than imports.
• B)such policies fail to address the government budget deficit.
• C)protectionism does not prevent immigration.
• D)protectionism increases foreign direct investment and technological transfer.
• E)such policies require all countries to coordinate their activities to be effective.

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Definitions:

Shutdown Point

The level of operation at which a business or economic activity is no longer profitable and should cease operations for financial reasons.

MC Curve

Refers to the Marginal Cost curve, which depicts the increase in total cost that results from producing one more unit of a good.

ATC Curve

The Average Total Cost curve, a graph that represents the cost per unit of output when all costs (variable and fixed) are considered.

Break-Even Point

The production level at which total revenues equal total expenses, resulting in neither a profit nor a loss.