Question

Why might a tax on domestic consumption of resources critical for national security be a more efficient approach than barriers to imports?

a) Taxes on domestic consumption are ineffective.
b) Barriers to imports harm national security.
c) Taxes on domestic consumption generate revenue.
d) Barriers to imports are more efficient in resource control.

Answer 1

A tax on domestic consumption can help conserve critical resources for national security and generate government revenue, while import barriers can lead to faster depletion of domestic resources and increased vulnerability in times of scarcity.

Step-by-step explanation:

A tax on domestic consumption of resources critical for national security might be a more efficient approach than barriers to imports for several reasons. Firstly, taxes on domestic consumption can help reduce the use of these resources within the country, conserving them for longer periods. This is in contrast to import barriers which can lead to accelerated depletion of domestic resources as they discourage the use of imported goods, potentially undermining national security in the long term.

Moreover, taxes on consumption generate additional revenue for the government, which can be used to further support national security efforts or invest in alternative resources and technologies. Lastly, relying on domestic resources alone, as encouraged by barriers to imports, can make a country more vulnerable if those resources become scarce or are disrupted.