Graphical Analysis of Tariffs Reveals That

question 254

Multiple Choice

Graphical analysis of tariffs reveals that

• A)they benefit domestic consumers at the expense of domestic producers.
• B)revenue gains outweigh the costs to domestic consumers.
• C)they increase domestic production of the good for which imports face tariffs.
• D)although the benefits are not shared equally, everyone in the domestic economy benefits from tariffs.

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Definitions:

Discount Rate

The interest rate used to determine the present value of future cash flows.

FCFF

Free Cash Flow to the Firm is a financial performance measure that estimates the cash available to all funding sources, both equity and debt holders, after accounting for necessary expenses and investments.

Depreciation

The monetary value decrease of an asset over time due to use, wear and tear, or obsolescence.

Perpetuity Growth Rate

The steady rate at which the cash flows from a perpetuity are expected to grow indefinitely.