For most products, Canada is a small economy with no market power in the global market. If Canada imposed a tariff on imported goods from a low-wage foreign country, this would
A.increase the Canadian price of the imported good.
B.reduce the price of the imported good in Canada.
C.improve Canada's terms of trade.
D.equalize the costs of production between the two countries.
E. Increased wages in low-wage foreign countries.
In the above problem of Canada imposes tariff on Imported Goods from a low wage foreign country
This would increase the Canadian price of imported goods.
Answer Is Option A.) increase the Canadian price of the imported goods.
When a country imposes tariff on imported goods which is type of tax to be paid to the government by the importer when they import the goods from foreign countries. Now the New prices in the country (Canada) will be the total of Previous price+ The tariff imposed by the government.
So the Canadian price of imported goods will increase in Canada.
This policy is generally adopted by the government to discourage imports of any commodity in particular or for all commodities in general.
This is basically done to protect the domestic firms from completion with imported goods and to improve the balance of trade between the countries.
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