Import tariffs generally ____ the output of domestic producers of the affected products and also ____ the output of domestic exporters.

Question

Quizplus · Accepted Answer

Import tariffs increase the cost of imported goods, making them less competitive in the domestic market. This leads to an increase in the output of domestic producers of the affected products as they face less competition. However, it also decreases the output of domestic exporters as they face higher tariffs in their target markets, making their products less competitive. Therefore, the correct answer is B, as import tariffs generally increase the output of domestic producers and decrease the output of domestic exporters.

Import Tariffs Generally ____ the Output of Domestic Producers of the Affected