The Smoot-Hawley Tariff Act

question 64

Multiple Choice

The Smoot-Hawley Tariff Act:

• A) was passed in response to World War II.
• B) was passed as a reaction to the Great Depression in the United States.
• C) was enacted by Germany.
• D) greatly reduced the barriers to trade.

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Definitions:

Market Inefficiency

This occurs when resources are not allocated optimally in a market, resulting in lost potential value.

Market Outcome

The result of all the buying and selling activities within a particular market, including price levels and quantities traded.

Equitable

Equitable refers to something characterized by fairness, impartiality, and justice, particularly in the way people are treated or decisions are made.

Market Failure

When the free market's distribution of goods and services is inefficient, it typically results in a reduction of societal welfare.