Question

Which of the following requires that some specific fraction of a good must be produced domestically?

A. International allocation requirement

B. Local content requirement

C. Specific quota requirement

D. Ad valorem portion requirement

E. Domestic sales requirement

Answer 1

A local content requirement is a trade policy that requires a specific fraction or percentage of a good to be produced domestically.

Step-by-step explanation:

The correct answer is B. Local content requirement. A local content requirement is a trade policy that requires a specific fraction or percentage of a good to be produced domestically. This policy aims to promote domestic production and protect domestic industries from foreign competition. For example, a country may require that a certain percentage of the components used in manufacturing a product must be sourced locally.