Question

The government of the Republic of Senna enforces tariffs and quotas to limit imported goods, while exports are subsidized. By using these instruments, the government seeks to achieve a surplus in the balance of trade. Based on this information, which approach most influences the Republic of Senna’s approach to international trade?

a. Multiple Choice
b. product life-cycle theory
c. new trade theory
d.Heckscher-Ohlin theory
e.theory of absolute advantage
f. mercantilism

Answer 1

The correct answer is f. mercantilism.

Step-by-step explanation:

Mercantilism is the trade in goods focused on generating wealth, that is, that the nation can accumulate precious metals such as gold.

This new commercial expression considered that the well-being of a nation depended on the capital that it could accumulate, that is, on the amount of metals (gold and silver) that the State could treasure, so they defended a positive trade balance with other countries. Therefore, this trend believed that the Government should apply a protectionist policy with which it would provide protection to the industrial branches of the economy that produced products for foreign markets and used customs tariffs as a protection mechanism.