Question

Select all that apply.

Why are protective tariffs considered negative?

They cause imports increase.
They cause imports to decrease.
Countries usually raise tariffs in retaliation.
Exports often decrease.
They cause people to buy more goods produced by their home countr

Answer 1

The correct answers are letters "B", "C" and, "D":

B) They cause imports to decrease.

C) Countries usually raise tariffs in retaliation.

D) Exports often decrease.

Step-by-step explanation:

Protective tariffs are taxes imposed on the import of certain products in order to protect the domestic manufacture of the same good. This action will cause the imported products to be more expensive since there are more taxes to be paid. After a period of time, those imported products will decrease in quantity but, in retaliation, the exporters will pass tariffs to the country that originally started to place them. This cycle will cause exports to slow down as well.

Answer 2

Protective tariffs are considered negative because:
1. THE CAUSE IMPORT TO DECREASE.
2. COUNTRIES USUALLY RAISE TARIFFS IN RETALIATION.
3. EXPORTS OFTEN DECREASE.
Protective tariff refers to the amount of money that a particular country levies on imports in order to protect the home industries. Protective tariff decreases the amount of imports that enters a country and it may spur the importing countries to retaliate. Because of the protective tariff, the incomes of the importing countries will be decreased and this will reduce their capacity to order exports from other countries, thus leading to decrease in exports.