Trade Regulations And Industrial Policies
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- Subject
- Trade Regulations And Industrial Policieseconomics-mcqs › trade-regulations-and-industrial-policies
- Published
- 27 May 2019
- Last updated
- 28 May 2026
In 1980, the United States enforced export limits on grain shipments to the Soviet Union as a reaction to its military invasion of Afghanistan. If other countries do not boost their grain exports to the Soviets, which of the following outcomes is least likely to happen?
Multiple choice question for Trade Regulations And Industrial Policies. Select an option, then review the explanation below.
Explanation
When the U.S. restricts grain exports to the Soviet Union, and no other nations compensate by increasing their exports, grain supply to the Soviets decreases, causing prices there to rise and reducing consumer surplus. U.S. producers would see a drop in export revenues due to lower sales. However, grain prices in the United States are unlikely to rise because the export quota reduces demand abroad, easing pressure on domestic prices.
More Trade Regulations And Industrial Policies MCQs
Practice related questions from the same subject.
- 1.Which theory proposes that governments can help local firms earn economic profits by competing against foreign rivals?
- 2.What is the primary impact of the most favored nation (MFN) clause in international trade?
- 3.What is the effect of implementing antidumping tariffs on imported goods?
- 4.Which statement accurately describes the situation regarding dumping?
- 5.Which type of protection, including measures like the escape clause, offers temporary relief to local industries challenged by fairly traded imports?