In general, the gains to some resources from free trade
Exceed losses suffered by other resources.This means
That, in principle:
A)the government should be able to tax resources that gain and compensate resources that lose, so all
Resources are better off with trade.
B)the government should tax imports in order to reduce the losses suffered by some resources.
C)the government ought to tax exports in order to collect revenue to compensate resources that lose from
Free trade.
D)the government ought to tax returns on land because these always increase with free trade.

Question

Quizplus · Accepted Answer

By taxing the resources that gain and compensating the resources that lose, the government can ensure that all resources are better off with free trade. This is because the gains to some resources from free trade outweigh the losses suffered by other resources. Therefore, taxing the gains and compensating the losses can result in a net benefit for all resources. Options B, C, and D are not accurate as they do not address the trade-offs involved in free trade and do not lead to overall benefits for all resources.

In General, the Gains to Some Resources from Free Trade