Which of the Following Is NOT a True Statement Regarding

question 180

Multiple Choice

Which of the following is NOT a true statement regarding free trade?

• A) Free trade promotes specialization and efficient production.
• B) Free trade generally reduces the domestic prices of imports.
• C) Free trade may stimulate economic growth through export sales.
• D) Every individual in a country gains short-term benefits from free trade.

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Definitions:

Status Quo

The existing state of affairs; in prospect theory, the current situation from which gains and losses are calculated.

Utility

A measure of satisfaction or value that consumers receive from consuming goods and services.

Endowment Effect

The tendency people have to place higher valuations on items they possess (are endowed with) than on identical items that they do not possess; perhaps caused by loss aversion.

Behavioral Economists

Economists who study how psychological, social, cognitive, and emotional factors affect the economic decisions of individuals and institutions.