If Canada imposes a tariff on imported steel, the tariff

Question

Quizplus · Accepted Answer

When a tariff is imposed on imported steel, the price of imported steel increases in Canada. This increases the cost of production for Canadian industries that rely on imported steel, leading to a decrease in demand for steel. Thus, the tariff does not lead to an increase in total consumption of steel. Furthermore, the tariff can lead to an increase in domestic production of steel as the demand for Canadian steel increases. This can lead to an increase in employment in the Canadian steel industry. Therefore, both options B and D are incorrect. Option A is the correct answer as the tariff raises the Canadian price of imported steel.

If Canada Imposes a Tariff on Imported Steel, the Tariff