Which of the Following Would Be the Most Likely Long-Run

question 29

Multiple Choice

Which of the following would be the most likely long-run effect if the United States increased its tariff rates and adopted stricter import quotas?

• A) a decrease in both U.S. imports and exports
• B) an increase in both U.S. imports and exports
• C) a decrease in U.S. imports and an increase in U.S. exports
• D) an increase in U.S. imports and a decrease in U.S. exports

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Definitions:

Month of May

The fifth month of the year in the Gregorian calendar, associated with spring in the northern hemisphere and autumn in the southern hemisphere.

Put Option

A financial contract allowing the holder to sell a stock, bond, commodity, or other asset at a specified price within a certain period.

Writer

In finance, it refers to the seller of an option contract, who is obligated to buy or sell the underlying asset if the option is exercised.

Premium

The amount by which the price of a security or insurance policy exceeds its par or face value or the cost of acquiring an option or futures contract.