Which of the following statements concerning tariffs is NOT true?
A)A tariff results in a deadweight loss.
B)A tariff creates revenue for the government.
C)A tariff decreases international trade.
D)A tariff leaves the price of imports unchanged.
E)A tariff decreases consumer surplus.

Question

Quizplus · Accepted Answer

A tariff increases the price of imports, leading to a reduction in the quantity demanded of imports. This reduction in demand shifts the demand curve for domestic goods to the right, leading to an increase in domestic prices. Therefore, the price of imports will increase, but the price of domestic goods may also increase.

Which of the Following Statements Concerning Tariffs Is NOT True