Author Question: Should the home country be large relative to its trade partners, its imposition of a tariff on ... (Read 123 times)

lilldybug07 · **on:** Jun 30, 2018

Should the home country be large relative to its trade partners, its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms of the trade rectangle exceed the sum of the

A) revenue effect plus redistribution effect.
B) protective effect plus revenue effect.
C) consumption effect plus redistribution effect.
D) production distortion effect plus consumption distortion effect.
E) terms of trade gain.

Question 2

An increase in the tariff on semiconductors lowers the effective rate of protection of computer producers.

Indicate whether the statement is true or false