Question

Which of the following identifies an attribute of tariffs?

A. Tariffs reduce the price of foreign goods for domestic consumers.

B. Tariffs reduce the overall efficiency of the world economy.

C. Tariffs increase exports from a sector.

D. Tariffs increase foreign competition for domestic producers.

E. Tariffs increase efficient utilization of resources.

Answer 1

Tariffs have two main attributes: they increase foreign competition for domestic producers and reduce the overall efficiency of the world economy.

Step-by-step explanation:

Tariffs are taxes placed on imported goods, and they have several attributes. One attribute of tariffs is that they increase foreign competition for domestic producers. By imposing tariffs on imported goods, domestic producers face less competition from foreign companies, allowing them to protect their industries and potentially increase their market share.

Another attribute of tariffs is that they can reduce the overall efficiency of the world economy. Tariffs create barriers to trade, which limit the flow of goods and services across borders. This reduction in trade can lead to a less efficient allocation of resources and lower overall economic growth.

Therefore, the correct answer to the question is D. Tariffs increase foreign competition for domestic producers and B. Tariffs reduce the overall efficiency of the world economy.