Should Canada impose a tariff on imports,one would expect Canada's:
A) Terms of trade to improve and volume of trade to decrease
B) Terms of trade to worsen and volume of trade to decrease
C) Terms of trade to improve and volume of trade to increase
D) Terms of trade to worsen and volume of trade to increase

Question

Quizplus · Accepted Answer

Imposing a tariff generally leads to an improvement in the terms of trade because it raises the price of imports relative to exports. However, it also tends to decrease the volume of trade as imports become more expensive and less attractive to consumers.

Should Canada Impose a Tariff on Imports,one Would Expect Canada's