Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increase in prices of imported goods, leading to greater demand for domestic alternatives
B
Decrease in prices of domestic goods, resulting in more imports
C
No change in the quantity demanded for domestic products
D
Increase in competition among domestic producers, lowering prices
Understanding the Answer
Let's break down why this is correct
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 country adds a tariff, it is essentially charging extra money on products coming from other countries. This makes imported goods more expensive, which can lead consumers to buy more products made within their own country instead. For example, if a country places a 10% tariff on imported shoes, those shoes will cost more, encouraging people to buy shoes made by local companies. As a result, while tariffs can protect domestic industries, they can also lead to higher prices for consumers.
Detailed Explanation
When tariffs are added, imported goods become more expensive. Other options are incorrect because Some might think that tariffs lower prices for local goods, but they actually raise prices for imports; It's a common belief that tariffs don't change how much people buy locally.
Key Concepts
Tariffs
Market Demand
Domestic Industries
Topic
Effects of Tariffs on Markets
Difficulty
easy level question
Cognitive Level
understand
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