In the Importing Country, the Most Likely Effect of a Tariff

question 137

Multiple Choice

In the importing country, the most likely effect of a tariff on a good is to:

• A) raise the price and decrease the quantity demanded.
• B) raise the price and increase the quantity demanded.
• C) raise the price without affecting the quantity demanded.
• D) decrease the quantity supplied.

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Definitions:

Debts Discharged

The cancellation of a debtor's obligation to pay a debt after fulfilling certain conditions, often under bankruptcy procedures.

Technically Insolvent

A financial state where an entity's liabilities exceed its assets, but it has not yet declared bankruptcy.

Bankruptcy Relief

Legal procedures designed to help individuals or businesses that cannot pay their debts to either eliminate those debts or repay them under the protection of bankruptcy court.

Businesses

Organizations engaged in commercial, industrial, or professional activities with the aim of earning profits.