Table 16-9 Each Year the United States Considers Renewal of Most Favored

Table 16-9
Each year the United States considers renewal of Most Favored Nation (MFN) trading status with China. Historically, legislators have made threats of not renewing MFN status because of human rights abuses in China. The non renewal of MFN trading status is likely to involve some retaliatory measures by China. The payoff table below shows the potential economic gains associated with a game in which China may impose trade sanctions against U.S. firms and the United States may not renew MFN status with China. The table contains the dollar value of all trade-flow benefits to the United States and China.

-Refer to Table 16-9.Pursuing its own best interests,China will impose trade sanctions against U.S.firms

A) only if the U.S.does not renew MFN status with China.
B) only if the U.S.renews MFN status with China.
C) regardless of whether the U.S.renews MFN status with China.
D) None of the above is correct.In pursuing its own best interests, Chine will in no case impose trade sanctions against U.S.firms.