Which of the Following Situations Will Arise in the Domestic

question 40

Multiple Choice

Which of the following situations will arise in the domestic market following the imposition of a tariff?

• A) imports decrease, domestic production increases, prices increase
• B) imports increase, domestic production increases, prices increase
• C) imports increase, domestic production decreases, prices decrease
• D) imports decrease, domestic production increases, prices decrease

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Definitions:

LIBOR

The London Interbank Offered Rate, an interest rate average calculated from estimates submitted by the leading banks in London, used as a reference rate for lending and borrowing between banks.

Tokyo Interbank Rate

A benchmark interest rate at which banks lend to each other in the Tokyo interbank market.

Euribor

The interest rate at which banks lend to each other in euros, serving as an important benchmark for various financial instruments in the Eurozone.

FIFO

The first-in, first-out accounting method of inventory valuation.