What is the effect of an export tariff in a large country on the importing country?
A) The importing country loses, since it pays a higher price for the product.
B) The importing country gains, since it pays a lower price for the product.
C) The importing country neither gains nor loses, since the world price does not change.
D) The importing country will gain from the terms of trade effect.

Question

Quizplus · Accepted Answer

An export tariff in a large country will raise the price of the product in the importing country, making it more expensive for them to purchase. This will lead to a loss for the importing country, as they will have to pay more for the product.

What Is the Effect of an Export Tariff in a Large