Suppose Russia would like to increase the amount of luxury goods brought into the country from other countries. What trade policy should Russia enact to accomplish this goal?
A) increase tariffs on luxury good imports
B) lower quota on luxury good imports
C) decrease tariffs on luxury good imports
D) devalue its currency

Question

Quizplus · Accepted Answer

Decreasing tariffs on luxury good imports would make them cheaper for Russian consumers, increasing the demand for these goods and incentivizing foreign producers to export more luxury goods to Russia. This would ultimately lead to an increase in the amount of luxury goods brought into the country. Increasing tariffs or lowering quotas would have the opposite effect, making luxury goods more expensive and reducing their availability in the Russian market. Devaluing the currency also would not necessarily lead to an increase in luxury imports, as it could also make all imports more expensive for Russian consumers.

Suppose Russia Would Like to Increase the Amount of Luxury