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? Multiple Choice product life-cycle theory new trade theory Heckscher-Ohlin theory theory of absolute advantage mercantilism

The approach that most influences the Republic of Senna’s approach to international trade, based on the information provided, is mercantilism. Mercantilism is an economic policy that emphasizes the role of government in regulating trade and commerce with the objective to increase national wealth, often through a positive balance of trade, which is achieved by exporting more than importing. The use of tariffs, quotas, and export subsidies as described for the Republic of Senna aligns with mercantilist policies designed to protect domestic industries and increase exports.

Mercantilism was a prevalent economic doctrine in the 16th to 18th centuries, primarily in Europe. It suggested that a country’s power depended largely on its wealth, which could be increased by a combination of acquiring gold and silver and maintaining a positive trade balance. The proponents of mercantilism argued in favor of a high level of government intervention in the economy to achieve these goals.

 Tariffs are taxes placed on imported goods. They make the imports more expensive, thus less attractive to consumers and businesses within the country, which can lead to a reduction in imports. - Quotas are limits on the quantity of goods that can be imported, which directly restricts the amount of foreign goods in the domestic market. - Export subsidies are financial support from the government to domestic companies for their export activities, making their products cheaper on the international market and more competitive.

These measures are intended to promote domestic production by protecting local industries from foreign competition and encouraging exports, aiming to achieve a favorable balance of trade, or trade surplus. While mercantilism is often associated with the past, elements of its policies can still be seen in the trade practices of many modern countries. Other theories mentioned, like the Heckscher-Ohlin theory, new trade theory, theory of absolute advantage, and product life-cycle theory, relate to different aspects of why countries trade and what they trade, but do not emphasize the aggressive trade surplus and government intervention characteristic of mercantilist policy.