Protectionism may fail to reduce a current account deficit because it
A)depreciates the dollar.
B)invites retaliation, which hurts exports.
C)encourages exports.
D)does not reduce imports.

Question

Quizplus · Accepted Answer

Protectionism often leads to retaliation from other countries, which hurts exports and can result in a wider current account deficit. It does not necessarily reduce imports in the short run, as domestic consumers may still demand foreign goods despite the tariffs or trade barriers.

Protectionism May Fail to Reduce a Current Account Deficit Because