ECONOMICS
BALANCE OF PAYMENTS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Improve and boost domestic employment
|
|
|
Worsen and increase foreign debt
|
|
|
Worsen and boost domestic employment
|
|
|
None of the above
|
Detailed explanation-1: -When a country imposes a tariff, foreign exporters have greater difficulty in selling their products. As their exports decline, they may cut prices in order to keep their sales from falling drastically. Thus, for example, when a tariff of $10.00 is imposed, foreign exporters may cut their price by, say, $6.00.
Detailed explanation-2: -Tariffs increase the price of goods and services in domestic markets by applying a tax on imported goods that is paid by the domestic importer. To cover the increased costs, the domestic importer then charges higher prices for the goods and services.
Detailed explanation-3: -Trade Policies Import quotas raise prices for imported goods, which reduces demand. Nations that restrict trade through high import tariffs and duties may run larger trade deficits than countries with open trade policies. This is because impediments to free trade may shut them out of export markets.
Detailed explanation-4: -Overvalued Exchange Rate. Economic Growth. Decline in Competitiveness/Export Sector. Higher Inflation. Recession in other countries. Borrowing Money. Financial Flows to Finance Current Account Deficit. 24-May-2019