"Tariffs are necessary for reasons of national security." Discuss the validity of this statement
It is argued that tariffs are a means of preventing a nation from becoming too dependent on foreign suppliers of goods vital to national security. The national security argument is usually not valid. If a nation's own resources are depletable, tariff-imposed reliance on domestic supplies will hasten depletion of domestic reserves, making the country even more dependent on imports in the future.
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Reform of a country's trading system, including the reduction or elimination of trade barriers, is an example of
A) an orthodox stabilization plan. B) a heterodox stabilization plan. C) economic populism. D) import substitution industrialization. E) structural reform.
A purely competitive firm:
A. must earn a normal profit in the short run. B. cannot earn economic profit in the long run. C. may realize either economic profit or losses in the long run. D. cannot earn economic profit in the short run.