Suppose a Small Country Sets All of Its Tariffs at 40

question 6

Multiple Choice

Suppose a small country sets all of its tariffs at 40% which causes a reduction in imports by 20%. If the total imports affected by the tariffs are 40% of GDP, the net national loss from the tariffs as a percentage of GDP is:

• A)1.6%.
• B)about 1%.
• C)6.4%.
• D)3.2%.

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Definitions:

Bilateral Anterior Cingulotomy

A neurosurgical procedure targeting the anterior cingulate cortex of the brain to treat certain psychiatric disorders.

Panic Disorder

Disorder in which panic attacks occur more than once or repeatedly and cause persistent worry or changes in behavior.

Bipolar Disorder

A psychological disorder characterized by significant fluctuations in mood, ranging from manic or hypomanic episodes to depressive states.

Psychoanalysis

A set of theories and therapeutic techniques related to the study of the unconscious mind, developed by Sigmund Freud, which seeks to treat mental disorders.