Who bears the burden of the terms-of-trade effect when a large country imposes a tariff?
A) foreign consumers
B) foreign producers
C) domestic producers
D) domestic consumers

Question

Quizplus · Accepted Answer

Foreign producers bear the burden of the terms-of-trade effect when a large country imposes a tariff because it can cause the world price of the good to decrease, impacting the revenue of foreign producers.

Who Bears the Burden of the Terms-Of-Trade Effect When a Large