The effect of the imposition of a new tariff is to domestic production of the commodity and the domestic consumption of the commodity.

Question

Quizplus · Accepted Answer

Imposing a new tariff will increase the cost of imported goods, making them more expensive for domestic consumers. This will lead to a decrease in domestic consumption. At the same time, domestic producers will benefit from the increased protection and may increase their production to meet the demand. This will lead to an increase in domestic production. Thus, the correct answer is C.

The Effect of the Imposition of a New Tariff Is