Suppose Iran Imposes a Tariff on Lumber

question 227

Multiple Choice

Suppose Iran imposes a tariff on lumber.For the tariff to have any effect,it must be the case that

• A)Iran is an exporter of lumber.
• B)the domestic quantity of lumber supplied exceeds the domestic quantity of lumber demanded at the world price without the tariff.
• C)the world price without the tariff is less than the price of lumber without trade.
• D)the world price without the tariff is greater than the price of lumber without trade.

---

Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, reflectively the interest payments due on any type of debt.

Face Value

The nominal value printed on a bill, bond, ticket, or other document, representing its value at issuance and/or redemption.

Effective-Interest Method

A method used in finance to systematically allocate the interest expense or income over the life of a financial asset or liability.

Interest Period

The span of time over which interest is calculated and charged on loans or investments.