Which of the following is an argument in favor of interventionist trade policies?
A)Cheaper capital goods
B)Declining terms of trade
C)Decreased losses from rent-seeking activities
D) All of the above
E) None of the above

Question

Quizplus · Accepted Answer

Declining terms of trade (when a country's exports fetch lower prices than the imports it buys) is a valid argument in favor of interventionist trade policies such as tariffs and quotas since they can protect domestic industries from competition and prevent further deterioration of the terms of trade. Cheaper capital goods and decreased losses from rent-seeking activities are not necessarily arguments in favor of interventionist trade policies.

Which of the Following Is an Argument in Favor of Interventionist