Question
A government imposes restrictions on imported goods to protect local industries, but domestic prices rise as a result.
How does this scenario illustrate the trade-offs involved in managing imports and exports?
It proves that trade restrictions eliminate the need for exports.
It demonstrates that restricting imports can lead to lower domestic prices.
It highlights how limiting imports may protect jobs but reduce consumer choice and increase costs
It shows that exports are always more valuable than imports.
How does this scenario illustrate the trade-offs involved in managing imports and exports?
It proves that trade restrictions eliminate the need for exports.
It demonstrates that restricting imports can lead to lower domestic prices.
It highlights how limiting imports may protect jobs but reduce consumer choice and increase costs
It shows that exports are always more valuable than imports.
Answers
GPT-4o mini
The scenario you described illustrates the trade-offs involved in managing imports and exports by emphasizing how limiting imports may protect jobs but reduce consumer choice and increase costs.
When a government imposes restrictions on imported goods to shield local industries, it may indeed safeguard domestic jobs in those industries. However, this protection often comes at the cost of higher prices for consumers, as domestic producers may not be as efficient or competitive as international suppliers. Consequently, consumers face reduced choices and higher costs, which is a significant trade-off in the policy decision.
Thus, the most accurate statement regarding the scenario is:
**It highlights how limiting imports may protect jobs but reduce consumer choice and increase costs.**
When a government imposes restrictions on imported goods to shield local industries, it may indeed safeguard domestic jobs in those industries. However, this protection often comes at the cost of higher prices for consumers, as domestic producers may not be as efficient or competitive as international suppliers. Consequently, consumers face reduced choices and higher costs, which is a significant trade-off in the policy decision.
Thus, the most accurate statement regarding the scenario is:
**It highlights how limiting imports may protect jobs but reduce consumer choice and increase costs.**