International Trade Policy Quiz

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Questions and Answers

What is one of the arguments for free trade mentioned in the text?

Producers benefit more from trade restrictions
Governments should intervene to regulate market prices
Producers and consumers allocate resources most efficiently without government distortion (correct)
Consumers pay lower prices with restricted trade

What is the estimated cost of protection for the world as a whole?

More than 10 percent of GDP
Less than 1 percent of GDP (correct)
Around 5 percent of GDP
Dependent on the country's economic status

Who benefits more from free trade according to the text?

Advanced economies like the United States and Europe
Developing countries (correct)
Japan
Small countries with restricted trade policies

What is the impact of a tariff on production and consumption?

<p>Leads to distortions in production and consumption (D)</p> Signup and view all the answers

What is the argument against free trade mentioned in the text?

<p>The estimated benefits of moving to free trade are only a small fraction of national income for most countries (A)</p> Signup and view all the answers

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