What Lesson Was Learned from the Imposition of the Smoot-Hawley

question 6

Multiple Choice

What lesson was learned from the imposition of the Smoot-Hawley tariff?

• A) Nations can usually work out their differences without any structure or international organization.
• B) Tariffs are often necessary to keep trade fair.
• C) Retaliation and tariff escalation are not as harmful as many suppose.
• D) A reduction of trade as a result of a tariff imposes large costs on the countries involved.

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Definitions:

Nonparticipating

A term often used in insurance to describe a policy that does not grant the holder the rights to share in the insurer's surplus or dividends.

Paid-In Capital

the amount of money that a company receives from issuing stock to investors, reflecting the capital invested by shareholders.

Fair Market Value

The price at which property would sell on the open market between a willing buyer and a willing seller.

Noncumulative Nonparticipating

Refers to a type of preferred stock that does not allow for the accumulation of unpaid dividends if they are not declared by the board, nor does it participate in the extra profits of the company.