Suppose an industry receives protection from the government in the form of tariffs. A number of years later, it is observed that the quantity supplied by domestic firms had decreased and that the domestic price was substantially greater than the world price. We could conclude that
A) the tariff had been imposed to counteract dumping and had been successful.
B) removal of the tariff would actually cause domestic output to increase and price to fall.
C) the tariff had been imposed to protect an infant industry and that the industry still needed protection.
D) removal of the tariff would cause domestic output to fall even further.
Correct Answer:
Verified
Q29: The infant-industry argument for tariff protection is
Q30: Dumping is
A) selling low-quality goods abroad.
B) exporting
Q31: Tariffs serve to
A) encourage exports.
B) encourage imports.
C)
Q32: Quotas serve to
A) encourage trade.
B) encourage imports.
C)
Q33: Some argue that American workers cannot compete
Q35: The effect of a tariff is to
A)
Q36: The effect of a tariff is to
A)
Q37: Which one of the following is FALSE?
A)
Q38: Which one of the following is FALSE?
A)
Q39: Which one of the following is FALSE?
A)
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