Question

In 2002, the United States placed higher tariffs on imports of steel. According to the open-economy macroeconomic model, how did this policy affect imports?

1) Imports increased
2) Imports decreased
3) Imports remained the same
4) Cannot be determined

Answer 1

Higher tariffs on imports of steel in the United States in 2002 led to an increase in imports according to the open-economy macroeconomic model.

Step-by-step explanation:

According to the open-economy macroeconomic model, when the United States placed higher tariffs on imports of steel in 2002, it affected imports by increasing them. This is because the higher tariffs made it cheaper for U.S. companies to purchase steel from abroad than at home. As a result, the United States imported more steel.