Reducing a tariff ________ the domestic production of the good and ________ the total domestic consumption of the good.
A)increases;increases
B)increases;decreases
C)decreases;increases
D)decreases;decreases
E)does not change;increases

Question

Quizplus · Accepted Answer

Reducing a tariff makes imported goods cheaper, which decreases the domestic production due to increased competition from imports, and increases the total domestic consumption as consumers have access to more affordable goods.

Reducing a Tariff ________ the Domestic Production of the Good