Who Gains from an Export Tariff in a Small Country

question 148

Multiple Choice

Who gains from an export tariff in a small country?

• A) consumers because consumer surplus increases and exporters because they can increase their prices
• B) exporters because they can increase their prices
• C) the government because it collects tariff revenues and consumers because consumer surplus increases
• D) exporters because they can increase their prices and the government because it collects tariff revenues

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Definitions:

Treasury Bonds

Long-term government bonds with maturity periods typically exceeding ten years, offering periodic interest payments.

Eurodollars

Dollar-denominated deposits at foreign banks or foreign branches of American banks.

Futures Contract

An agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

CAPM

The Capital Asset Pricing Model, a theoretical framework used to determine the expected return on an investment, considering risk and the time value of money.