If a (Large) Country B Puts an Export Tax on a Good

question 22

Multiple Choice

If a (large) country B puts an export tax on a good, and assuming that world demand for The export from B is not perfectly inelastic, then, because of the tax, the price of the good In country B will __________ and the price of the good on the world market __________.

• A) increase; also will increase
• B) increase; will decrease
• C) decrease; will increase
• D) decrease; also will decrease

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Definitions:

Statement of Cash Flow

A financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations, investment activities, and financial activities, as well as all cash outflows that pay for business activities and investments during a given period.

Operating Activities

The day-to-day actions that involve the production, sales, and delivery of a company's product or service, which are reflected in its cash flows.

Investing Activities

Activities related to acquiring or disposing of non-current assets, such as property, plant, and equipment, which are used to generate revenue over multiple periods.

Free Cash Flow

The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.