Critics of Free Trade Sometimes Argue That Allowing Imports from Foreign

question 8

Multiple Choice

Critics of free trade sometimes argue that allowing imports from foreign countries causes a reduction in the number of domestic jobs.An economist would argue that

• A)foreign competition may cause unemployment in import-competing industries,but the effect is temporary because other industries,especially exporting industries,will be expanding.
• B)foreign competition may cause unemployment in import-competing industries,but the increase in consumer surplus due to free trade is more valuable than the lost jobs.
• C)the critics are correct,so countries must protect their industries with tariffs or quotas.
• D)foreign competition may cause unemployment in import-competing industries,but the increase in the variety of goods consumers can choose from is more valuable than the lost jobs.

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Definitions:

Straight-Line Method

A technique for determining depreciation or amortization by equally distributing an asset's cost throughout its lifespan.

Salvage Value

An asset’s expected trade-in value at the point it concludes productive life.

Depreciation

Spreading out the cost of a tangible asset systematically over its life of service.

Property Plant

Long-term physical assets owned by a company, such as buildings and machinery, used in operations to generate revenue.