When a country imposes tariffs, it is likely to cause
A) Increased quantities of imports.
B) Higher prices for the import-competing goods.
C) Lower prices for domestic production.
D) Less expensive exports.

Question

Quizplus · Accepted Answer

When a country imposes tariffs, it makes the imported goods more expensive, hence making the import-competing goods higher priced too. This is done to protect domestic production from foreign competition. Thus, the imposition of tariff leads to higher prices for the import-competing goods.

When a Country Imposes Tariffs, It Is Likely to Cause