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Basic Question 16 of 17
Refer to the graph below. Suppose the initial supply and demand curves are S1 and D1 but then a tariff is imposed. The tariff will cause ______
B. S1 to shift to S2.
C. D1 to shift to D2.
D. D1 to shift to D0.
A. S1 to shift to S0.
B. S1 to shift to S2.
C. D1 to shift to D2.
D. D1 to shift to D0.
User Contributed Comments 1
| User | Comment |
|---|---|
| mikus | Tariff is imposed on importers not foreign producers. hence, a tariff will result in higher price of imports which will cause a shift in supply curve from S1 to S0. Also, since the price of imports is now higher, quantity of imports will decrease which will cause a shift in demand curve from D1 to D0. Thoughts? |
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Learning Outcome Statements
compare types of trade restrictions, such as tariffs, quotas, and export subsidies, and their economic implications
CFA® 2024 Level I Curriculum, Volume 1, Module 6.