Question

question 8 (multiple choice worth 5 points)
(01.04r mc)

when trade barriers are removed or lowered, the result is often

a disruption in the supply chain
greater economic growth
job displacement
less efficient exchange of goods

Explanation:

Analyze the effect of removing trade barriers

Trade barriers, such as tariffs, quotas, and regulations, restrict the flow of goods and services between countries. When these barriers are removed or lowered (promoting free trade), countries can specialize in producing goods where they have a comparative advantage.

Evaluate the options against economic principles

• a disruption in the supply chain: Lowering barriers generally streamlines and stabilizes international supply chains rather than disrupting them.
• greater economic growth: Removing trade barriers increases trade volume, lowers consumer prices, fosters competition, and leads to more efficient resource allocation, which historically drives overall economic growth.
• job displacement: While some specific sectors may face competition, the broad, primary intended macroeconomic result of reducing barriers is overall growth and efficiency, making "greater economic growth" the most standard correct answer in introductory economics.
• less efficient exchange of goods: Lowering barriers directly increases the efficiency of exchanging goods by reducing transaction costs and artificial price distortions.

Answer:

• a disruption in the supply chain
• greater economic growth (Correct answer)
• job displacement
• less efficient exchange of goods