Generally, if a nation imposes a tariff on imports,
A)part of the tax is paid by foreign exporters.
B)the entire tax is paid by foreign exporters.
C)none of the tax is paid by foreign exporters.
D)the tax has no impact on the profits of foreign exporters.

Question

Quizplus · Accepted Answer

When a nation imposes a tariff on imports, part of the tax is paid by foreign exporters. This is because the tariff raises the price of the imported goods, which reduces demand for them. As a result, the foreign exporters may have to lower their prices to maintain their sales levels. This means that they will absorb some of the cost of the tariff. However, the rest of the cost will likely be passed on to the consumers in the importing country, who will have to pay higher prices for the goods.

Generally, If a Nation Imposes a Tariff on Imports