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.
Question
- 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.
Solution
The argument suggests that special interest groups may promote protectionist policies that could potentially decrease national economic welfare. This leads to:
A) a presumption that in practice a free trade policy is likely to be better than alternatives. This is because free trade policies generally promote economic growth and welfare by allowing goods and services to move freely across borders, leading to more efficient allocation of resources.
B) a presumption that trade policy should be shifted to Non-Governmental Organizations, so as to limit taxpayer burden. This is not necessarily a direct conclusion from the argument. While NGOs may play a role in trade policy, the argument does not specifically suggest this as a solution.
C) a presumption that free trade is generally a second-best policy, to be avoided if feasible alternatives are available. This is not a likely conclusion from the argument. The argument suggests that protectionist policies may harm economic welfare, not that free trade is a second-best policy.
D) a presumption that free trade is the likely equilibrium solution if the government allows special interest groups to dictate its trade policy. This is not a likely conclusion from the argument. The argument suggests that special interest groups may promote protectionist policies, not that they would promote free trade.
E) a presumption that protectionist policies will better serve a country as a whole than free trade policies. This is the opposite of what the argument suggests. The argument suggests that protectionist policies may harm national economic welfare.
Therefore, the most likely answer is A) a presumption that in practice a free trade policy is likely to be better than alternatives.
Similar Questions
Policies that restrict free trade are known as what?
1. The efficiency case made for free trade is that as trade distortions such as tariffs aredismantled and removedA) government tariff revenue will decrease, and therefore national economic welfare willdecrease.B) government tariff revenue will decrease, and therefore national economic welfare willincrease.C) deadweight losses for producers and consumers will decrease, hence increasing nationaleconomic welfare.D) deadweight losses for producers and consumers will decrease, hence decreasing nationaleconomic welfare.E) government tariff revenue will increase, hence increasing national economic welfare.
6. The reason protectionism remains strong in the United States is thatA) economists can produce any result they are hired to produce.B) economists cannot persuade the general public that free trade is beneficial.C) economists do not really understand how the real world works.D) the losses associated with protectionism are diffuse, making lobbying by the publicimpractical.E) economists cannot agree on trade policy recommendations.
Supporters of free trade argue that it creates which economic benefit?A.Protecting workers by enforcing international labor regulationsB.Increasing efficiency by allowing for greater specializationC.Helping the environment by reducing emissions from shippingD.Promoting independence by reducing reliance on foreign goods
Subsidies and tax breaks are forms ofGroup of answer choicesprotectionism.free trade.GATT.globalization.
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