A tariff placed on imported foreign vehicles will have what effect?

Question

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Placing a tariff on imported foreign vehicles will make them more expensive for Americans to purchase. This will likely lead to Americans buying more domestic vehicles, which will be relatively cheaper in comparison. Thus, the tariff will incentivize the purchase of domestic vehicles and may help support the domestic auto industry. Option A is incorrect because a tariff would limit the amount of foreign car producers are able to produce, not make them produce more. Option B is incorrect because the purpose of the tariff is to make foreign vehicles more expensive, which would discourage Americans from buying them. Option C is also incorrect because while foreign producers may generate higher revenues on the vehicles that are imported, the overall amount of cars being imported could potentially decrease due to the higher prices.

A Tariff Placed on Imported Foreign Vehicles Will Have What