If Slovenia is a large country in world trade, then if it imposes a large set of tariffs on many of its imports, this would
A) increase its exports.
B) have no effect on its terms of trade.
C) harm its terms of trade.
D) improve its terms of trade.
E) decrease its marginal propensity to consume.

Question

Quizplus · Accepted Answer

Imposing tariffs can improve a large country's terms of trade by reducing import demand, potentially lowering world prices for those goods and improving the relative price of its exports.

If Slovenia Is a Large Country in World Trade, Then