The effects of tariffs and quotas are: a(n)__________ in the prices of imported goods to domestic consumers,and a(n)__________ in imports.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Question

Quizplus · Accepted Answer

Tariffs and quotas are trade barriers that restrict the entry of foreign goods into a domestic market. Tariffs are taxes imposed on imported goods, while quotas limit the amount of goods that can be imported. Both tariffs and quotas increase the cost of importing goods. As a result, domestic consumers will pay a higher price for the imported goods, leading to an increase in prices. On the other hand, because the cost of importing goods has increased, it will make foreign products less attractive and less competitive in the domestic market. It will result in a decrease in imports. Therefore, the correct answer is choice letter B.

The Effects of Tariffs and Quotas Are: A(n)__________ in the Prices