THE CORRECT ANSWER IS D. THE CITIZENS OF COUNTRY Y OFTEN TAKE VACA...

21. The correct answer is D.

The citizens of Country Y often take vacations in Country X because

the exchange rate makes Country X cheaper for citizens of Country

Y. But citizens of Country Y rarely buy clothes or electronics in

Country X, despite the fact that these items are cheaper in Country

X, even with sales tax. We are asked to find a choice that could

explain this behavior.

Choice D states that the government of Country Y imposes tariffs on

imported goods. This suggests that perhaps items that are

purchased in Country X and brought into Country Y become

prohibitively expensive because of the tariffs. This could explain the

spending habits of citizens of Country Y. Correct.