If a country imposes a tariff on an imported good,the tariff ________ the price in the importing country and ________ the quantity of imports.
A)raises;increases
B)raises;does not change
C)lowers;does not change
D)lowers;increases
E)raises;decreases

Question

Quizplus · Accepted Answer

When a tariff is imposed on an imported good, the price of the good in the importing country increases because the tariff is essentially a tax on the imported good. As a result, consumers in the importing country are less likely to purchase the more expensive imported good, and instead turn to domestically produced substitutes. This decrease in demand for imports leads to a decrease in the quantity of imports. Therefore, the tariff raises the price in the importing country and decreases the quantity of imports.

If a Country Imposes a Tariff on an Imported Good,the