When the management team reviewed its government contract on office furnishings, they noticed that in order to bid on the project, at least 44 percent of the value of the office furniture had to be produced in the United States. This stipulation is an example of a (n)

Multiple Choice

antidumping policy.

voluntary export restraint.

administrative trade policy.

local content requirement.

ad valorem tariff.

Answer: Local content requirement

Explanation:

Local content requirements (LCRs) are the policy measures that require a certain amount of intermediate goods that are used in the production processes to be gotten from domestic manufacturers.

Majority of local content requirements are aimed at different sectors of the economy in order to pursue economic growth and also encourage infant industries to be competitive internationally in their manufacturing capability. Local content requirements give incentives for the local firms to produce and to lower production costs over time.

Local content requirement