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Why Does Protectionism Cause a "Deadweight Loss" in Trade

Question 21

Multiple Choice

Why does protectionism cause a "deadweight loss" in trade?


A) Protectionism is likely to cause trade partners to raise trade barriers,thus costing exporters sales.
B) Developing countries have to go into debt to subsidize consumers so they can buy the higher priced imports.
C) It causes countries to switch production to industries where lack of comparative advantage makes production less efficient.
D) It creates a loss of sales tax revenue from decreased consumption.

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