📚 Learning Guide
Effects of Tariffs on Markets
easy

What is the likely effect of imposing tariffs on imported goods on the export levels of a country?

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Choose the Best Answer

A

Exports will increase due to reduced competition.

B

Exports will decrease as domestic goods become more expensive.

C

Exports will remain unchanged regardless of tariffs.

D

Exports will increase only in non-tariffed goods.

Understanding the Answer

Let's break down why this is correct

Answer

Imposing tariffs on imported goods usually makes those goods more expensive for consumers in the country that applies the tariffs. As a result, people may choose to buy more locally made products instead of the imported ones. This can help local businesses grow, but it can also lead to other countries imposing their own tariffs in response. When other countries do this, it can hurt the exports of the original country because their goods become more expensive for foreign buyers. For example, if Country A places a tariff on steel from Country B, Country B might then tax the goods it imports from Country A, making it harder for Country A to sell its products abroad.

Detailed Explanation

When tariffs are added, imported goods cost more. Other options are incorrect because Some might think that less competition helps exports; It's a common belief that tariffs don't change exports.

Key Concepts

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Topic

Effects of Tariffs on Markets

Difficulty

easy level question

Cognitive Level

understand

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