Praxis II Citizenship

Answer: C - Free trade is the opposite of protectionism. A protectionist policy attempts to improve domestic revenue by imposing restrictions or financial deterrents on foreign trade. For example, imagine that Japan and the United States each make a television and both units are equal in every way except that the Japanese TV costs $200 less than the American TV. The U.S. could enact a protectionist tariff that, when passed on to the consumer, resulted in the Japanese TV costing $100 more than the American TV, which would encourage U.S. buyers to purchase the domestic brand. While a balanced trade agreement differs from protectionism by giving equal opportunity to some foreign products, it is still subject to protective measures such as tariffs. Free trade, on the other hand, does not have any restrictions. While it allows more competition in the domestic marketplace, the ultimate result is a domestic economy that can specialize in the production of products that offer it the most competitive advantage in the global marketplace, resulting in greater income.