All but one of the following statements is used to justify protectionism. Which statement is not used to justify protectionism?
A) Free trade reduces employment by driving domestic firms out of business.
B) Free trade leads to higher prices for imported goods.
C) Trade restrictions are necessary to protect new firms until they can gain experience and become more productive.
D) A country should not rely on other countries for goods that are critical to its national defense.
B
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In an open economy, the current account balance equals ________. (Assume that the capital account is zero and net transfers are zero.)
A) net foreign investment + domestic investment B) net foreign investment C) net capital outflows D) the financial account balance + net income on investments
The World Trade Organization
A) was set up to increase tariffs among nations. B) was set up to negotiate exchange rates between countries. C) was set up to decrease tariffs among nations. D) handles trade disputes among its member nations.