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; decreases
B) raises; increases
C) lowers; does not change
D) raises; does not change

Question

Quizplus · Accepted Answer

A tariff on an imported good raises the price of that good in the importing country because the cost of importing the good increases. This higher price typically leads to a decrease in the quantity of imports, as domestic consumers buy less of the more expensive imported goods.

If a Country Imposes a Tariff on an Imported Good