Assume that the U.S. is expected to impose a small tariff on goods imported from
ID: 2656410 • Letter: A
Question
Assume that the U.S. is expected to impose a small tariff on goods imported from Country P. At the same time, Country P is not expected to retaliate by imposing extra tariff on goods imported from U.S.. Other things being equal, this should ____________ U.S. demand for krank, ______________ supply of krank for sale, and ________________ the equilibrium value of krank. A. not affect, decrease, increase B. increase, not affect, decrease C. decrease, increase, decrease D. not affect, increase, decrease E. decrease, not affect, decrease
Explanation / Answer
Option E. decrease, not affect, decrease.
Assume that the U.S. is expected to impose a small tariff on goods imported from Country P. At the same time, Country P is not expected to retaliate by imposing extra tariff on goods imported from U.S.. Other things being equal, this should decrease U.S. demand for krank, not affect supply of krank for sale, and decrease the equilibrium value of krank.