The Change in the Economic Welfare of a Country Associated

question 71

Multiple Choice

The change in the economic welfare of a country associated with an increase in a tariff equals

• A) efficiency loss - terms of trade gain.
• B) efficiency gain - terms of trade loss.
• C) efficiency loss + tax revenue gain.
• D) efficiency loss + tax revenue gain + terms of trade gain.
• E) efficiency loss - tax revenue gain.

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Definitions:

Debt Ratings

Assessments provided by rating agencies that evaluate the creditworthiness of debt issuers and their financial instruments.

Default Risk

Default risk is the chance that a borrower will be unable to make the required payments on their debt obligations.

Interest Rate Risk

The risk of loss to an investor from changes in the price of a bond that arise from changes in the market interest rate. Also called price risk and maturity risk.

Maturity Risk

Maturity risk pertains to the uncertainty and potential loss associated with holding a bond or other fixed-income investment until its maturity date.