Quiz on Free Trade and Protectionism

Which of the following is a key advantage of free trade?

• Increased government revenue

• Greater consumer choices

• Decreased competition

• Reduced innovation

One major disadvantage of free trade is:

• Reduced economic growth

• Job losses in uncompetitive industries

• Increased government spending

• Lower foreign investment

Protectionist policies are implemented to:

• Encourage foreign competition

• Reduce domestic employment

• Protect local industries

• Increase free trade

Which of the following is NOT a method of trade protectionism?

• Tariffs

• Quotas

• Subsidies

• Free trade agreements

A tariff is:

• A limit on the number of goods imported

• A tax imposed on imports

• A subsidy for exports

• A trade agreement

The primary effect of an import quota is to:

• Increase the quantity of imports

• Reduce government revenue

• Limit the supply of foreign goods

• Lower domestic prices

Which type of tariff is set as a fixed amount per unit of an imported good?

• Ad valorem tariff

• Specific tariff

• Compound tariff

• Revenue tariff

One disadvantage of tariffs is that they:

• Encourage imports

• Increase government spending

• Raise prices for consumers

• Reduce domestic production

Which of the following is NOT a type of quota?

• Absolute quota

• Tariff-rate quota

• Export quota

• Free quota

The main effect of a quota is to:

• Reduce the price of domestic goods

• Encourage unlimited imports

• Restrict the quantity of imports

• Increase global trade