Subsidies and tax breaks are forms ofGroup of answer choicesprotectionism.free trade.GATT.globalization.

The global movement towards free trade is based upon the reduction or elimination of ______.Multiple choice question.production efficiency incentivestrade barriersglobal tax havensnon-capitalist governments

7. It is argued that special interest groups are likely to take over and promote protectionistpolicies, which may lead to a decrease in national economic welfare. This argument leads toA) a presumption that in practice a free trade policy is likely to be better than alternatives.B) a presumption that trade policy should be shifted to Non-Governmental Organizations, so asto limit taxpayer burden.C) a presumption that free trade is generally a second-best policy, to be avoided if feasiblealternatives are available.D) a presumption that free trade is the likely equilibrium solution if the government allowsspecial interest groups to dictate its trade policy.E) a presumption that protectionist policies will better serve a country as a whole than free tradepolicies.

An optimal tariff in a large economyGroup of answer choicesalways leads to trade warsleads to an increase in world welfaredoes not affect world welfareleads to a decrease in world welfare

A tax applied to imported goodsGroup of answer choicesCapitalismTariffGlobalizationColonialism

Subsidies are:Question 47Select one:a.when governments tax one industry more than other industries.b.when governments have a negative trade balance.c.when governments provide financial support to an industry they want to protect.d.when governments place limits on the the quantities of imports.e.when governments place a tax on imports.