How do high tariffs and other restraints on international trade affect the prosperity of a nation?
A)They increase domestic employment and thereby promote the growth of real GDP.
B)They prevent the nation from fully realizing potential gains from specialization,exchange,and competition,thereby reducing economic growth.
C)They tend to reduce rent-seeking and lobbying by producers and thereby promote economic growth.
D)Both a and c are correct.

Question

Quizplus · Accepted Answer

High tariffs and other restraints on international trade hinder a nation from fully enjoying the benefits of specialization, exchange, and competition, which leads to reduced economic growth. While such restraints may offer short-term increases in domestic employment, the overall effect is a decline in a nation's prosperity.

How Do High Tariffs and Other Restraints on International Trade