9. Imposing a tariff on a commodity raises the price of the imported commodity in the domestic economy. The increase in domestic prices on account of the tariff causing a fall in consumption of domestic goods reflects the_____________ of the tariff.
a. Protective effect
b. Revenue effect
c. Consumption effect
d. Terms of trade effect
9. Imposing a tariff on a commodity raises the price of the imported commodity in the domestic economy. The increase in domestic prices on account of the tariff causing a fall in consumption of domestic goods reflects the_____________ of the tariff.
a. Protective effect
b. Revenue effect
c. Consumption effect
d. Terms of trade effect
Related textbook solutions
Related questions
1. An import tariff
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a. lowers the domestic price of the exported good below the world price. |
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b. keeps the domestic price of the exported goods the same as the world price. |
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c. raises the domestic price of the imported good above the world price |
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d. lowers the domestic price of the imported good below the world price. |
2. Which two accounts are included in the balance of payments:
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a. current account and the reserve account. |
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b. current account and the trade account. |
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c. current account and the capital account. |
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d. trade account and the capital account. |
3. A producer has a comparative advantage in the production of a good when the producer:
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a. has a production cost that is less than sales revenue. |
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b. has the highest cost of production compared to any other producer. |
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c. is comparatively more efficient at producing the good than it is at producing anything else. |
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d. specializes through the use of an assembly line. |
4. According to the Fischer effect, if the "real" rate of interest in a country is 4 percent and expected annual inflation is 9 percent, the "nominal" interest rate will be _____.
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C. 9 percent |
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D. 36 percent |
