The imposition of an import tariff by a large country can cause:
A) a decrease in imports.
B) an increase in the country's welfare.
C) a decrease in the country's welfare.
D) All of the above
E) None of the above

Question

Quizplus · Accepted Answer

An import tariff can lead to a decrease in imports as goods become more expensive, potentially increase the country's welfare by protecting domestic industries and generating government revenue, but it can also decrease welfare by leading to higher prices and less efficient resource allocation.

The Imposition of an Import Tariff by a Large Country