What Will Happen to Domestic and World Prices When a Large

question 71

Multiple Choice

What will happen to domestic and world prices when a large country imposes an export tariff?

• A) The world price will increase and the domestic price will decrease.
• B) Both the world price and the domestic price will increase
• C) The world price will decrease and the domestic price will increase.
• D) Both the domestic price and world price will decrease.

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Definitions:

Inventory Purchases

Transactions involved in buying goods and materials to be sold or used in the production process by a business.

Collection of Cash

Collection of cash involves the process of receiving cash payments from customers or clients, typically recorded as an increase in cash or cash equivalents on the balance sheet.

Accrual Basis Accounting

Revenues are recognized when goods and services are provided to customers, and expenses are recognized in the same period as the revenues to which they relate, regardless of when cash is received or paid.

Revenues

The total amount of money received or expected to be received by a company from its business activities, such as the sale of goods or services, before any expenses are deducted.