When the government imposes an excise tax on foreign imports:
A) domestic consumers are harmed.
B) domestic firms benefit.
C) domestic firms are harmed.
D) domestic consumers are harmed and domestic firms benefit.

Question

Quizplus · Accepted Answer

When the government imposes an excise tax on foreign imports, it increases the cost of these goods. This harms domestic consumers by making foreign goods more expensive for them. At the same time, it can benefit domestic firms by reducing competition from cheaper foreign imports, potentially increasing demand for domestically produced goods.

When the Government Imposes an Excise Tax on Foreign Imports