What Is the Effect of the High (15

question 44

Multiple Choice

What is the effect of the high (15.3%) U.S. tariff on garments imported from Bangladesh on the Bangladesh economy?

• A) It has no effect on the Bangladesh economy, since U.S. consumers ultimately pay the tariff.
• B) It distorts production and prices, equivalent to imposing a tax of $4.61 on every Bangladeshi citizen.
• C) It improves Bangladesh's terms of trade with the United States.
• D) It has a very small effect on the Bangladeshi economy, since only 10% of its exports to the United States are subject to the tariff.

---

Definitions:

Direct Investment

The purchase of a substantial stake in a foreign company or the establishment of business operations in a foreign country, such as a factory or other facility.

Greatest Potential Risk

Refers to the highest level of uncertainty or danger that could impact the success or existence of a project or investment.

Direct Investment

An investment in the form of a controlling ownership in a business in one country by an entity based in another country.

Mexican Market

Can pertain to either the physical marketplaces within Mexico known for their vibrant commerce or the broader economic and consumer market of Mexico.