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Should the Home Country Be "Large" Relative to Its Trade

Question 10

Multiple Choice

Should the home country be "large" relative to its trade partners,its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms of the trade rectangle exceed the sum of the


A) consumption effect plus redistribution effect.
B) revenue effect plus redistribution effect.
C) protective effect plus revenue effect.
D) terms of trade gain.
E) production distortion effect plus consumption distortion effect.

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