In 2002,the U.S.imposed higher tariffs on steel imports to save American jobs.However,the
30 percent increase in tariffs on steel imports imposed a net job loss on the U.S.in part because:
A)the substitution effect of the tax led consumers to buy more of other domestic goods.
B)the tariff led to the depreciation of the dollar and an increase in exports.
C)consumers spent less on other goods as a result of higher steel prices.
D)the tariff was not high enough to sustain employment in the American steel industry.

Question

Quizplus · Accepted Answer

When the U.S. imposed higher tariffs on steel imports, it led to higher steel prices for American consumers. This caused consumers to spend less on other goods, resulting in a net job loss in the U.S. economy. Therefore, choice C is the best answer. The other choices are less relevant to the outcome of the steel tariff policy.