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- Subject
- Tariffseconomics-mcqs › tariffs
- Published
- 28 May 2019
- Last updated
- 28 May 2026
When I buy a stereo from South Korea, I receive the stereo and South Korea gets the dollars. However, if I buy a stereo made in Pakistan, I get the stereo and the rupees stay within Pakistan. How should this reasoning be interpreted?
Multiple choice question for Tariffs. Select an option, then review the explanation below.
Explanation
The reasoning appears convincing at first, but it is deceptive because the dollars South Korea receives are often spent on Pakistani products, creating a cycle of trade rather than a one-way flow of currency.
More Tariffs MCQs
Practice related questions from the same subject.
- 1.Under a free trade system, what is the total worth of imports?
- 2.What do empirical studies generally indicate about the nature of U.S. import tariffs?
- 3.Which of the following statements about government trade policies is NOT typically true?
- 4.If the nominal tariff on finished computers is 12% and the weighted average nominal tariff on the inputs for making computers is 18%, what can be said about the effective rate of protection for the computer sector?
- 5.If Pakistan applies a tariff on ballpoint pens consisting of 25 rupees per pen plus 12% of the pen's price, what type of tariff is this an example of?