CFA Practice Question

There are 581 practice questions for this topic.

CFA Practice Question

The introduction of a tariff is expected to ______
A. increase the price of the imported good and the domestic competing good.
B. decrease the quantity of competing goods produced by domestic firms.
C. decrease the price of domestic competing goods.
Explanation: A tariff shifts the supply of the imported good to the left, increasing its price and reducing the quantity sold. It also has the effect of increasing (NOT decreasing) the price of domestic competing goods and increasing the quantity of competing goods produced by domestic firms.

User Contributed Comments 0

You need to log in first to add your comment.