📚 Learning Guide
Effects of Tariffs on Trade
easy

What is one primary effect of imposing tariffs on imported goods?

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Choose the Best Answer

A

Increase in domestic production

B

Decrease in government revenue

C

Increase in consumer prices

D

Decrease in employment rates

Understanding the Answer

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Answer

One primary effect of imposing tariffs on imported goods is that it makes those goods more expensive for consumers. When a government places a tariff, which is a tax on imports, the price of the foreign products increases. This can lead consumers to buy less of those imported items and instead choose to buy domestically produced goods, which might be cheaper. For example, if a country imposes a tariff on imported cars, people may decide to buy cars made in their own country instead. This can help local businesses but might also mean fewer choices and higher prices for consumers.

Detailed Explanation

When tariffs are added to imported goods, it makes those goods more expensive. Other options are incorrect because Some might think tariffs lower government income; It might seem that tariffs would lower prices.

Key Concepts

tariffs
Topic

Effects of Tariffs on Trade

Difficulty

easy level question

Cognitive Level

understand

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