Multiple Choice
Which of the following is a way the government can reduce the wealth gap in a mixed market economy?
81
views
7. Externalities
Public Solutions to Externalities
Multiple Choice
Which of the following scenarios is an example of a trade sanction?
A
Country A provides subsidies to domestic steel producers to encourage local production.
B
Country A imposes a tax on domestic steel producers to reduce pollution.
C
Country A restricts imports of steel from Country B in response to environmental violations.
D
Country A negotiates an international agreement to reduce carbon emissions.
Verified step by step guidance1
Understand the definition of a trade sanction: it is a penalty or restriction imposed by one country on another to influence behavior, often involving trade barriers like tariffs, quotas, or import restrictions.
Analyze each scenario to see if it involves a penalty or restriction on trade between countries:
Scenario 1: Subsidies to domestic producers are a form of support, not a sanction, because they encourage local production rather than restrict trade.
Scenario 2: A tax on domestic producers to reduce pollution is a domestic policy, not a trade sanction, since it does not target foreign trade.
Scenario 3: Restricting imports of steel from another country in response to environmental violations is a direct trade restriction aimed at influencing another country's behavior, which fits the definition of a trade sanction.
Related Videos
Related Practice
