CFA Practice Question

There are 341 practice questions for this study session.

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.

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