The optimum tariff is
A) the best tariff a country can obtain via a WTO negotiated round of compromises.
B) the tariff, which maximizes the terms of trade gains.
C) the tariff, which maximizes the difference between terms of trade gains and terms of trade loses.
D) not practical for a small country due to the likelihood of retaliation.
E) not practical for a large country due to the likelihood of retaliation.
E
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Understanding the distinction between positive and normative economic statements is important because it
a. enables us to derive better forecasts of macroeconomic aggregates such as GDP b. explains why economics is not a physical science c. is the primary distinction between macroeconomics and microeconomics d. provides a framework for understanding differences among economists e. enables us to see the rationale behind economic models