If Canada Reduces the Tariff Imposed on a Commodity from 10

question 20

Multiple Choice

If Canada reduces the tariff imposed on a commodity from 10 percent to 5 percent, we would expect to observe

• A)a downward shift in the commodity's demand curve.
• B)an increase in the amount of the commodity imported into Canada.
• C)an upward shift in the commodity's demand curve.
• D)an increase in Canada's terms of trade.
• E)an increase in tariff revenue by the Government of Canada.

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Definitions:

Initial Cost

The purchase price or construction cost of an asset or investment, not accounting for depreciation or amortization.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into use, reflecting its loss of value over time.

Gain Or Loss

The financial result when the selling price of an asset differs from its cost, resulting in either profit (gain) or deficit (loss).

Original Cost

The initial purchase price or investment made to acquire an asset, not accounting for depreciation or amortization.