Question

Assume a simple world in which the US exports beverage to France and Imports wine from France. If the US imposes large tariffs on the French wine, what is the likely impact on the values of the US beverage firms, US wine producers, the French beverage firms and the French wine producers (assuming that French government will retaliate)?

A. Both French wine producers and French beverage firms will be adversely affected.

B. Both US wine producers and US beverage firms will be adversely affected.

C. Both French wine producers and US beverage firms will be adversely affected.

D. Both US wine producers and French beverage firms will be adversely affected.

Answer 1

1. US imposed large tariff on French wine which will adversely impact the French Wine Producers and will benefit US Wine producers

2. in retaliation French government imposes large tariff's on US Beverage which will adversely affect the US Beverage producers and will benefit french beverage producers.

Option C Both French wine producers and US beverage firms will be adversely affected.