Question

When a government limits imports via tariffs and quotas and subsidizes exports in order to maximize exports and minimize imports, the country is following A. A mercantilist philosophy B. The theory of absolute advantage C. The theory of comparative advantage D. The Heckscher-Ohlin theory

Answer 1

Answer:

The correct answer is letter "A": A mercantilist philosophy.

Explanation:

The mercantilist philosophy is the economic approach whereby governments control their economies to reduce imports and maximize exports. It is believed that by taking such a measure, the wealth of the nation would increase as a result of the surplus in the balance of trade of the country. The trade balance is calculated by subtracting imports from exports.