The main reason why one nation trades with another is to
a. save its natural resources from rapid depletion
b. exploit the advantages of specialization.
c. eliminate the danger of retaliation from other nations.
d. improve political alliances.
b
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Vertical equity refers to a tax system in which individuals with higher incomes pay more in taxes than individuals with lower incomes
a. True b. False Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1. Import tariffs benefit the consumers of the product involved. 2. If demand for a product is increasing, an import tariff is less restrictive than an import quota. 3. Export subsidies tend to hurt domestic consumers and benefit the foreign consumers. 4. A voluntary export restraint (VER) is similar to an import quota; except that the former benefits the foreign producers while the latter benefits the domestic producers. 5. Trade protection in most instances transfers wealth from consumers to domestic producers.