Characterize the two different approaches a nation can take to achieve free trade. Does one approach have an advantage over the other?
A unilateral approach is when a country removes its trade restrictions on its own. A multilateral approach is when a country removes its trade restrictions while other countries do the same. A multilateral approach has two advantages. The first is that it has the potential to result in freer trade because it can reduce trade restrictions abroad as well as at home. If international negotiations fail, however, the result could be more restricted trade than under a unilateral approach. Also, the multilateral approach may have a political advantage and can sometimes win political support when a unilateral reduction cannot.
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In order to maximize its profits, a price-taking firm should produce the level of output at which:
A) total revenue = total cost. B) average revenue = average cost. C) variable revenue = variable cost. D) marginal revenue = marginal cost.
Nonfinancial businesses in Germany, Japan, and Canada raise most of their funds
A) by issuing stock. B) by issuing bonds. C) from nonbank loans. D) from bank loans.
A circular-flow diagram is a visual model of the economy
a. True b. False Indicate whether the statement is true or false
What happens to the total surplus in a market when the government imposes a tax?
a. Total surplus increases by the amount of the tax. b. Total surplus increases but by less than the amount of the tax. c. Total surplus decreases. d. Total surplus is unaffected by the tax.