Question

Quotas are favoured over free international trade by:?

?consumers in the importing country and consumers in the exporting country.

?domestic producers in the importing country and foreign producers with quota rights.

?domestic producers and domestic consumers in the exporting country.

?foreign producers without quota rights and consumers in the importing country.

?foreign consumers and domestic producers in the exporting country.

Retaliation of trade restrictions can:

set off still greater trade restrictions, leading to an outright trade war.

recover the surplus lost during the period of trade barriers.

decrease rent-seeking activities in an economy.

increase the potential gains from trade through specialization.

lead to phasing out of tariffs and quotas.

Which of the following statements defines trade balance??

The trade balance is the sum of the services balance, the current account balance, and the capital account balance.?

?The trade balance is merchandise exports minus merchandise imports.

?The trade balance is the sum of the current account balance and the capital account balance.

?The trade balance is foreign purchases of domestic assets minus domestic purchases of foreign assets.

?The trade balance is the sum of the services balance and the capital account balance.

Answer 1

Answer.)

Q1.) domestic producers in the importing country and foreign producers with quota rights.

Q2.) set off still greater trade restrictions, leading to an outright trade war.

From the economic point of view, the nation should be aware of the fact that other countries are likely to retaliate and, as a result, the opportunity cost of trade restrictions will rise.

Q3.) The trade balance is merchandise exports minus merchandise imports.

A nation has a favorable balance of trade when the value of its exports of goods is greater than the value of its imports of goods.