In 2007, European Union (EU) negotiators have offered to cut tariffs for Latin American bananas to avoid "banana wars". What are the effects of a cut in tariffs?
A) The quantity of bananas imported into the EU will increase.
B) The price of bananas for consumers will increase.
C) The quantity of bananas produced in the EU (such as in France and Spain) will increase.
D) Europe will start to export bananas.

Question

Quizplus · Accepted Answer

A cut in tariffs makes imported bananas cheaper, leading to an increase in the quantity imported.

In 2007, European Union (EU) Negotiators Have Offered to Cut