What is the effect of the high (15.3%) U.S. tariff on garments imported from Bangladesh on the Bangladesh economy?
A) It has no effect on the Bangladesh economy, since U.S. consumers ultimately pay the tariff.
B) It distorts production and prices, equivalent to imposing a tax of $4.61 on every Bangladeshi citizen.
C) It improves Bangladesh's terms of trade with the United States.
D) It has a very small effect on the Bangladeshi economy, since only 10% of its exports to the United States are subject to the tariff.
Correct Answer:
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