In General, the Gains to Some Resources from Free Trade

question 31

Multiple Choice

In general, the gains to some resources from free trade exceed losses suffered by other resources. This means that, in principle:

• A) the government should be able to tax resources that gain and compensate resources that lose, so all resources are better off with trade.
• B) the government should tax imports in order to reduce the losses suffered by some resources.
• C) the government ought to tax exports in order to collect revenue to compensate resources that lose from free trade.
• D) the government ought to tax returns on land because these always increase with free trade.

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