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An Import Tariff Reduces the Welfare of a "Small" Country

question 94

True/False

An import tariff reduces the welfare of a "small" country by an amount equal to the redistribution effect plus the revenue effect.


Definitions:

Racial Bias Effect

The influence of an individual's race on the perceptions, attitudes, and actions of others, often leading to prejudice and discrimination.

Ultimate Attribution Error

The systematic error made when evaluating the behavior of a group member, attributing positive behaviors to situational factors and negative behaviors to inherent characteristics.

Ingroup Bias

The tendency to favor and extend loyalty to members of one's own group over those from different groups.

Outgroup Derogation

A psychological phenomenon where people tend to view and judge members of a group to which they do not belong less favorably than their own group (ingroup).

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