Because a large nation can force the nation exporting the product to pay a substantial amount of the tariff, its _________ may improve after the tariff is imposed.
A) consumption
B) production
C) terms of trade
D) income tax collection rate

Question

Quizplus · Accepted Answer

Terms of trade refer to the ratio between a country's export prices and its import prices. By imposing a tariff, the importing country can increase the cost of the exported product, forcing the exporting country to pay more for trade. This can result in an improvement in the importing country's terms of trade.

Because a Large Nation Can Force the Nation Exporting the Product