The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4

-When dealing with strategic trade policy, one practical problem for government is the likelihood of retaliation by foreign governments.

Question

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4
 
-When dealing with strategic trade policy, one practical problem for government is the likelihood of retaliation by foreign governments.

Quizplus · Accepted Answer

Strategic trade policy involves the use of government intervention to affect international trade patterns and gain advantages for domestic firms. One potential drawback of such policies is the possibility of retaliation by other countries, which could harm the domestic economy through reduced exports and increased costs. Therefore, the statement is true.

The Figure Below Shows the Demand (D) and Supply (S)