Should the Home Country Be "Large" Relative to Its Trade

question 10

Multiple Choice

Should the home country be "large" relative to its trade partners,its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms of the trade rectangle exceed the sum of the

• A)consumption effect plus redistribution effect.
• B)revenue effect plus redistribution effect.
• C)protective effect plus revenue effect.
• D)terms of trade gain.
• E)production distortion effect plus consumption distortion effect.

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Definitions:

Unusual Item

A gain or loss in financial statements that is infrequent or uncommon in occurrence.

Corporate Income Tax

Taxes imposed on the income or profit of corporations and other business entities by government authorities.

Outlet Stores

Retail stores that sell products directly from manufacturers at reduced prices, often overstock or discontinued lines.

Return On Total Assets

A measure of the profitability of assets, without regard to the equity of creditors and stockholders in the assets.