Trade Restrictions

question 92

Multiple Choice

Trade restrictions:

• A) help to save jobs in the protected industry, which causes these workers to spend more money in other industries, netting increased output and job opportunities throughout the economy.
• B) are a very inexpensive way of saving jobs, cheaper than job retraining programs.
• C) may save jobs in one industry but at a cost of less job growth in other industries.
• D) often have little support by politicians, media, and the public.

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Definitions:

Unlevered Cost of Capital

The cost of capital for a company with no debt, reflecting the required rate of return on equity for an entirely equity-financed firm.

After-Tax Net Income

The amount of money a company or individual earns after all taxes have been deducted from the gross income, reflecting the actual profit.

Levered Firm

A company that employs debt in its capital structure, as opposed to an unlevered firm which is financed only through equity.

Annual Coupon

The fixed interest payment a bondholder receives from the bond's issuer each year.