Question

Which of the following is true of the effect of high tariffs on an economy in the long run?

A. They increase the market for exports.
B. They decrease employment in the industries protected by the tariff.
C. They benefit some groups at the expense of others.
D. They encourage industries protected by the tariff to be more efficient and competitive.

Answer 1

High tariffs benefit certain domestic industries at the cost of higher prices for consumers and potential job losses in unprotected sectors, leading to inefficiencies and reduced competitiveness on a global scale.

Step-by-step explanation:

The question asks which statement is true about the long-run effects of high tariffs on an economy. The correct answer is C. They benefit some groups at the expense of others. High tariffs do protect certain domestic industries but at the cost of higher prices for consumers and potential job losses in unprotected industries. Protectionism leads to inefficiencies and deters industries from becoming more competitive globally. Instead of creating more overall employment, it simply reshuffles jobs from unprotected to protected industries. Furthermore, protectionism prevents the economic gains that might be achieved through comparative advantage, specialized learning, and economies of scale.