Suppose That the U

question 74

Multiple Choice

Suppose that the U.S.imposes a countervailing duty of 10% on
Coated paper imported from China to offset alleged Chinese subsidies.
Suppose further that the U.S.duty­free price of Chinese coated paper
Imports is $500 per 1,000 meter roll and that the price of an
Equivalent roll of U.S.­made coated paper is $600 per 1,000 meter
Roll.What is the likely response of Chinese coated paper exporters to
The U.S.countervailing duty?

• A)They will not change their U.S.duty­free price of their exports and absorb all of the duties.
• B)They are likely to reduce their U.S.duty­free price of their exports by one­half.
• C)They are likely to reduce their U.S.duty­free price of their exports so that their U.S.prices, including the duties, are less than $600 per
• 1,000 meter roll.
• D)They are likely to reduce their U.S.duty­free price of their exports so that their U.S.prices, including the duties, are only slightly more
• Than $600 per 1,000 meter roll.

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Definitions:

Factors

Elements or conditions that contribute to producing a specific outcome or effect.

Notes Receivable

Financial assets representing amounts owed to the holder by others through formal written promises to pay at a future date.

Credit Period

The time frame allowed by a seller for a buyer to pay for goods or services, typically expressed in days.

Collateral

An asset that a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.