📚 Learning Guide
Effects of Tariffs on Trade
easy

If a country imposes a tariff on imported goods, what is the most likely immediate effect on domestic consumers?

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Choose the Best Answer

A

They will pay higher prices for the goods.

B

They will have access to more imported goods.

C

Their purchasing power will increase.

D

They will benefit from increased competition.

Understanding the Answer

Let's break down why this is correct

Answer

When a country imposes a tariff on imported goods, it means that an extra tax is added to those goods when they enter the country. This usually leads to higher prices for those imported items because businesses often pass the cost of the tariff onto consumers. As a result, domestic consumers may find that they have to pay more for products they want, which can lead to them buying less. For example, if a country imposes a tariff on imported shoes, the price of those shoes might increase, causing people to either pay more or choose to buy shoes made in their own country instead. Overall, the immediate effect is that consumers face higher prices and fewer choices.

Detailed Explanation

When a tariff is added, it raises the cost of imported goods. Other options are incorrect because Some might think tariffs increase the number of goods available; People might believe that tariffs help them buy more.

Key Concepts

Tariffs and their effects on trade
Consumer behavior in response to price changes
Supply and demand dynamics
Topic

Effects of Tariffs on Trade

Difficulty

easy level question

Cognitive Level

understand

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