When explicit export taxes are imposed on exports the results is that export crop's domestic price will________.This new tax effectively ________domestic producers and ___________domestic consumers.

Question

Quizplus · Accepted Answer

When explicit export taxes are imposed, the domestic price of the export crop will decrease due to a decrease in supply in the domestic market. This new tax effectively taxes domestic producers by reducing their potential revenue from exports and subsidizes domestic consumers by providing them with cheaper prices for the export crop.

When Explicit Export Taxes Are Imposed on Exports the Results