Post Utme Nile University 2019 Economics Question 35

Practice objective / multiple choice question 35 from the 2019 Post Utme Nile University Economics examination.

Post Utme Nile University 2019 Economics Objective / Multiple Choice
Question 35 POST_UTME_NILE_UNIVERSITY • 2019 • ECONOMICS • objective

A country's government is considering impo\sing a tax on imports to reduce the trade deficit. Explain the effects of the tax on the trade deficit and the overall economy.

Answer Options

Correct Answer A. The tax will reduce the trade deficit by reducing imports, but will also reduce economic growth by increa\sing the \cost of imports.
B. The tax will increase the trade deficit by increa\sing imports, and will also reduce economic growth by increa\sing the \cost of imports.
C. The tax will have no effect on the trade deficit, but will reduce economic growth by increa\sing the \cost of imports.
D. The tax will reduce the trade deficit by reducing imports, and will also increase economic growth by reducing the \cost of imports.
Correct Answer
A
Correct Option:
The tax will reduce the trade deficit by reducing imports, but will also reduce economic growth by increa\sing the \cost of imports.

About This Question

This is Post Utme Nile University 2019 Economics Question 35. It is one of the objective questions from the 2019 Post Utme Nile University Economics examination.

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