In a small nation,the revenue effect of a tariff accrues to the foreign producer of the imported good.

Question

Quizplus · Accepted Answer

In a small nation, the revenue effect of a tariff accrues to the government of the importing country, not the foreign producer. The tariff increases the price of the imported good, making it less attractive to consumers and potentially creating an opportunity for local producers to increase their market share. The additional revenue collected from the tariff can be used by the government for various purposes, such as funding public goods or reducing budget deficits.

In a Small Nation,the Revenue Effect of a Tariff Accrues