A High Tariff on Imported Good X Might Reduce Domestic

question 140

Multiple Choice

A high tariff on imported good X might reduce domestic employment in industry Y if

• A) X is an input used domestically in producing Y.
• B) X and Y are substitute goods.
• C) X is an inferior good.
• D) Y is an inferior good.

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Definitions:

Capital Intensity Ratio

A financial metric that compares a company's total assets to its sales revenue, used to evaluate how much capital is needed to generate sales.

Total Assets

The sum of all assets owned by a company, including current, fixed, and intangible assets, as reported on the balance sheet.

Capacity Utilization

The percentage of a firm or industry's total production capacity that is actually being used over a specific period.

Plug Variable

A variable that is used in financial modeling to make the balance sheet balance, often representing the financing needed or surplus cash.