Many Economists Criticise Protectionism Because It Causes Losses to Consumers

question 83

Multiple Choice

Many economists criticise protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why, then, do some people support protectionism?

• A)The criticisms of economists are based on theory.In fact, protectionism increases consumer and producer surplus as well as employment.
• B)Supporters of protectionism in high-income countries believe that wages will fall as a result of competition with firms from developing countries.
• C)Supporters of protectionism believe free trade will cause their countries to lose their comparative advantage.
• D)Supporters of protectionism believe that free trade will lead to inflation.

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Definitions:

Distributive Bargaining

A negotiation strategy in which one party gains at the expense of another, often characterized by a competitive stance aiming to divide a fixed amount of resources.

Functional Conflict

Disagreements that contribute positively to organizational outcomes by enhancing work processes or performance.

Groupthink

A psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Administrative Orbiting

A tactic used to delay decision-making through endless reviews and requests for additional information without outright refusal.