Chapter 44, Problem 1MCQ

To determine

The correct option defining the reason for trade restrictions.

Answer to Problem 1MCQ

Option b is correct.

Explanation of Solution

Explanation for the correct option:

b.

Trade restrictions are not good for economic development along with its efficient working. Even though trade restrictions are imposed to protect the economy from foreign competition. Therefore, option b is correct.

Explanation for incorrect options:

a.

Trade restrictions are majorly imposed to protect domestic industries from foreign competitors as industries can invade and harm domestic industries. Therefore, option a is the incorrect answer.

c.

Sending or receiving money from and to other countries is not the major concern. Therefore, option c is incorrect.

d.

Countries do not impose such restrictions to avoid being over reliant on another country. Therefore, option d is in incorrect.

e.

Since all of the options are not correct. Therefore, option e is incorrect.

Economics Concept Introduction

International trade: International trade is an exchange of goods and services across nations. This is due to globalization and comparative advantage. It means goods are produced in one country and are sold in some other country.