After a Tariff Is Imposed on a Good,the Price of the Good

question 23

Multiple Choice

After a tariff is imposed on a good,the price of the good

• A) does not change.
• B) falls.
• C) rises.
• D) rises only if the domestic demand for the good does not change.
• E) might rise, fall, or not change depending on whether the government did or did not simultaneously impose a quota.

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Definitions:

Present Value

The present value of a future amount of money or series of cash flows, based on a given return rate.

Initial Investment

Initial investment refers to the capital amount spent to start a business venture, project, or purchase an asset.

Intangible Benefit

A non-quantifiable advantage or positive outcome derived from a product or service, such as brand recognition or customer loyalty.

Discount Rate

This is the discount rate used to figure out what future cash flows are worth in the present in discounted cash flow analysis.