📚 Learning Guide
Effects of Tariffs on Markets
easy

What is a primary effect of implementing tariffs on imported goods in international trade?

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Choose the Best Answer

A

Increased prices for consumers

B

Increased supply of imported goods

C

Decreased domestic production

D

Abolishment of trade deficits

Understanding the Answer

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Answer

A primary effect of implementing tariffs on imported goods is that it makes those goods more expensive for consumers. When a government imposes a tariff, it adds an extra cost to the price of imported items, which can lead to higher prices for consumers who want to buy those products. For example, if a country imposes a tariff on imported cars, the price of those cars will increase, making it more likely that people will choose to buy cars made in their own country instead. This change can help local manufacturers by giving them a competitive advantage, but it may also limit choices for consumers and lead to higher overall prices. In the long run, while tariffs can protect local jobs, they can also create tension in international trade relationships.

Detailed Explanation

When tariffs are added, it makes imported goods more expensive. Other options are incorrect because Some might think tariffs increase the amount of imported goods; It's a common belief that tariffs reduce local production.

Key Concepts

International Trade
Topic

Effects of Tariffs on Markets

Difficulty

easy level question

Cognitive Level

understand

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