Post Utme Crawford University 2019 Economics Question 36

Practice objective / multiple choice question 36 from the 2019 Post Utme Crawford University Economics examination.

Post Utme Crawford University 2019 Economics Objective / Multiple Choice
Question 36 POST_UTME_CRAWFORD_UNIVERSITY • 2019 • ECONOMICS • objective

The government of a country decides to impose a tax on imports to reduce the trade deficit. However, the tax is not levied on exports. Analyze the impact of this policy on the balance of payments u\sing the Marshall-Lerner condition. Assume that the initial trade deficit is $100 million, and the tax rate is 10%.

Answer Options

A. The trade deficit will increase by $10 million.
Correct Answer B. The trade deficit will decrease by $10 million.
C. The trade deficit will remain unchanged.
D. The trade deficit will increase by $20 million.
Correct Answer
B
Correct Option:
The trade deficit will decrease by $10 million.

About This Question

This is Post Utme Crawford University 2019 Economics Question 36. It is one of the objective questions from the 2019 Post Utme Crawford University Economics examination.

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