The imposition of tariffs on imports results in deadweight welfare losses for the home economy.These losses consist of the
A) protective effect and the consumption effect.
B) redistribution effect and the revenue effect.
C) revenue effect and the protective effect.
D) consumption effect and the redistribution effect.

Question

Quizplus · Accepted Answer

The deadweight welfare losses from tariffs include the protective effect, which reduces imports and protects domestic industries, and the consumption effect, which occurs when domestic consumers face higher prices and thus reduce their consumption of the good.

The Imposition of Tariffs on Imports Results in Deadweight Welfare