The positive effect of a tariff is, when there is an increase in the welfare of a country due to
A)An improvement in the terms of trade
B)An increase in its volume of trade
C)A reduction in its volume of trade
D)A decrease in its volume of trade

Question

Quizplus · Accepted Answer

An improvement in the terms of trade can be a positive effect of a tariff, as it may allow a country to import goods at more favorable prices relative to the prices at which it exports goods, potentially increasing national welfare.

The Positive Effect of a Tariff Is, When There Is