CHAPTER 4 - 87 Chapter 5:Tariffs CHAPTER 4 TARIFFS...

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Chapter 5: Tariffs 87 CHAPTER 4 TARIFFS MULTIPLE-CHOICE QUESTIONS 1. The imposition of tariffs on imports results in deadweight welfare losses for the home economy. These losses consist of the: a . Protective effect plus consumption effect b. Redistribution effect plus revenue effect c. Revenue effect plus protective effect d. Consumption effect plus redistribution effect 2. Suppose that the United States eliminates its tariff on steel imports, permitting foreign-produced steel to enter the U.S. market. Steel prices to U.S. consumers would be expected to: a. Increase, and the foreign demand for U.S. exports would increase b. Decrease, and the foreign demand for U.S. exports would increase c. Increase, and the foreign demand for U.S. exports would decrease d. Decrease, and the foreign demand for U.S. exports would decrease 3. A $100 specific tariff provides home producers more protection from foreign competition when: 4. A lower tariff on imported aluminum would most likely benefit: 5. When a government allows raw materials and other intermediate products to enter a country duty free , its tariff policy generally results in a (an):
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88 Test Bank for International Economics, 9e 6. Of the many arguments in favor of tariffs, the one that has enjoyed the most significant economic justification has been the: a. Infant industry argument b. Cheap foreign labor argument c. Balance of payments argument d. Domestic living standard argument 7. The redistribution effect of an import tariff is the transfer of income from the domestic:
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