While trade restrictions do provide gains to certain segments in the economy, such restrictions will always lower national welfare.

Question

Quizplus · Accepted Answer

Trade restrictions, such as tariffs and quotas, can sometimes increase national welfare under specific conditions, such as protecting infant industries or addressing market distortions. However, they often lead to inefficiencies and can provoke retaliatory measures from other countries, impacting overall welfare negatively. The effect on national welfare depends on various factors, including the structure of the economy, the nature of the goods involved, and the global economic environment.

While Trade Restrictions Do Provide Gains to Certain Segments in the Economy