Tariffs reallocate income from
A)consumers to producers.
B)producers to consumers.
C)government to producers.
D)consumers to foreigners.

Question

Quizplus · Accepted Answer

Tariffs are taxes on imported goods, which increase their price and make them less competitive against domestically produced goods. As a result, consumers are likely to shift away from imported goods towards domestic goods, increasing demand and therefore the price of domestic goods. The tariff revenue is collected by the government, which can be used to support the producers of locally made goods. Thus, tariffs reallocate income from consumers to producers.

Tariffs Reallocate Income from