Gce Model Questions Vol1 2023 Economics Question 47
Practice objective / multiple choice question 47 from the 2023 Gce Model Questions Vol1 Economics examination.
A small open economy initially has an export price index of \(120\) and an import price index of \(100\). The government introduces a specific tariff of \(\$5\) per unit on an imported good whose domestic price before the tariff is \(\$20\) and quantity imported is 500 units. Export price per unit remains at \(\$30\) with quantity exported 400 units. Assuming the tariff raises the import price index proportionally, what is the percentage decrease in the country's terms of trade after the tariff is imposed? Give your answer as a positive percentage to the nearest whole number.
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About This Question
This is Gce Model Questions Vol1 2023 Economics Question 47. It is one of the objective questions from the 2023 Gce Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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