Suppose Country X exports good A and imports good B. And, Country Y exports good B and imports good A. When country Y imposes an import tariff, what happens to the terms of trade in these countries and what is the impact of this on economic welfare (assume no other factor determines economic welfare).
Suppose Country X exports good A and imports good B. And, Country Y exports good B and imports good A. When country Y imposes an import tariff, what happens to the terms of trade in these countries and what is the impact of this on economic welfare (assume no other factor determines economic welfare).
Chapter2: Economics: Eight Powerful Ideas
Section: Chapter Questions
Problem 16P
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![Suppose Country X exports good A and imports good
B. And, Country Y exports good B and imports good A.
When country Y imposes an import tariff, what
happens to the terms of trade in these countries and
what is the impact of this on economic welfare (assume
no other factor determines economic welfare).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff08c8e4c-b242-47bc-acb3-11b447166c61%2F89613d35-b3c9-4d71-be9a-6f3ffc7fe56b%2F7h16bcb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose Country X exports good A and imports good
B. And, Country Y exports good B and imports good A.
When country Y imposes an import tariff, what
happens to the terms of trade in these countries and
what is the impact of this on economic welfare (assume
no other factor determines economic welfare).
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