Question:

. Which of the following government economic policies would be the most efficient solution to the problem po

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6. Which of the following government economic policies would be the most efficient solution to the problem posed by furniture made in China and sold in the United States?

A. Subsidize U.S. furniture manufacturers so they can competitively continue to make furniture

B. Impose a tariff on U.S. imports of furniture made in China

C. Provide unemployment benefits and job retraining for U.S. workers who lose their jobs due to the lower-priced furniture from China

D. Negotiate with China's government to reduce furniture exports voluntarily to the United States

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2 ANSWERS


  1. The answer is A, although C needs to be done in the long run. B is a tariff and D is basically a quota. Quotas and Tariffs reduce total surplus in an economy, but subsidies, if done correctly, can increase producer surplus by more than the money the government spends on the subsidy. C needs to be done in the long run, but it is not the most efficient solution.


  2. I think the quickest path toward helping the American worker would be  "A."

    Follow that with "C."

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