Question

Which of the following is FALSE?

Select one:

a. Even when tariffs are relatively low, the cost per job saved tends to be high.

b. Commercial policy is grossly inefficient at achieving the objective of job preservation.

c. Trade barriers in high-income countries do not cause unintended consequences in low-income countries because most of their trade is with other industrialized countries.

d. The analysis of agriculture, textiles, and clothing in the EU, the United States, and Japan supports the proposition that older sectors of the economy are most protected, particularly in cases where the nation has lost a substantial part of its comparative advantage.

Answer 1

"C"

Trade barriers in high-income countries do not cause unintended consequences in low income countries because most of their trade is with other industrialised countries is false, so the right answer. With trade protection low income nations are hit harder because they lack the local demand and cannot diversify the trade quickly to change the consequences.