📚 Learning Guide
Effects of Tariffs on Markets
easy

What is the primary effect of imposing tariffs on imported goods in a domestic market?

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Choose the Best Answer

A

Decrease in domestic prices

B

Increase in domestic production

C

Increase in consumer choice

D

Decrease in government revenue

Understanding the Answer

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Answer

The primary effect of imposing tariffs on imported goods is that it raises the price of those goods for consumers in the domestic market. When a government places a tariff, it adds a tax to imported items, making them more expensive than local products. This can lead consumers to buy more domestically produced goods, which may help local businesses grow. For example, if a country imposes a tariff on imported cars, people might choose to buy cars made in their own country instead, which can support local car manufacturers. However, it can also mean that consumers have fewer choices and may pay higher prices overall.

Detailed Explanation

When tariffs are added, it makes imported goods more expensive. Other options are incorrect because Some might think tariffs lower prices, but they actually raise costs; People may believe tariffs increase choices, but they limit options.

Key Concepts

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Effects of Tariffs on Markets

Difficulty

easy level question

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understand

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