Arguments Against International Trade quiz #1 Flashcards
Arguments Against International Trade quiz #1
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What is the definition of trade protectionism? Trade protectionism is the practice of shielding domestic industries from foreign competition by using measures such as tariffs, quotas, and other trade restrictions. Which of the following is not expected to occur as a result of international trade? A complete loss of all domestic jobs is not expected; instead, jobs shift to industries where the country has a comparative advantage. Which of the following is not a frequently cited reason for restricting trade with other countries? Increasing the variety of goods available to consumers is not a reason for restricting trade; it is a benefit of trade. Which is not a commonly heard argument for protectionism? Lowering consumer prices through foreign competition is not an argument for protectionism; it is a benefit of trade. Which of the following is a risk associated with international trade? A risk is the potential threat to national security if key resources are traded to foreign countries. What would most Americans see as a disadvantage of globalization? Most Americans may see job losses in certain industries as a disadvantage of globalization. Why would a mercantilist government be interested in other areas of the world? A mercantilist government would be interested in other areas to expand its access to resources and markets, aiming to increase national wealth through trade surpluses. What is one negative effect of current patterns in global trade? One negative effect is the loss of jobs in industries where a country does not have a comparative advantage. Which of the following is not mentioned by Professor Cowen as one of the benefits of trade? Protection of domestic industries from foreign competition is not mentioned as a benefit; instead, benefits include increased variety of goods, lower costs, greater efficiency, and enhanced flow of ideas. What is a potential downside of using trade restrictions as a bargaining chip in international negotiations? Using trade restrictions as leverage can backfire if the other country calls your bluff, potentially resulting in political embarrassment and loss of international credibility.