A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to increase barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies would most economist think would promote growth?
A)both the first and the second
B)the first but not the second
C)the second but not the first
D)neither the first nor the second

Question

Quizplus · Accepted Answer

Both policies of increasing barriers to trade and restricting foreign portfolio investment are considered protectionist and can ultimately harm economic growth. By limiting trade and investment, a country is closing itself off to potential opportunities for growth and innovation. Instead, most economists advocate for free trade and open investment policies to promote economic growth.

A Country with a Relatively Low Level of Real GDP