If the US (A Large Country) Imposes a Tariff on Its Imported

question 15

Multiple Choice

If the U.S. (a large country) imposes a tariff on its imported good, this will tend to

• A) cause a deterioration of U.S. terms of trade.
• B) have no effect on terms of trade.
• C) improve the terms of trade of all countries.
• D) raise the world price of the good imported by the United States.
• E) improve the terms of trade of the United States.

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in an equal annual amount.

Net Working Capital

The difference between a company's current assets and current liabilities.

Variable Costs

Expenses that change in proportion to the activity of a business such as costs for raw material which increase as production increases.