Question

When a nation institutes a tariff on a trading partner:_______.

a. domestic producers gain, consumers lose, and the government gains revenue.
b. domestic producers gain, consumers gain, and the government gains revenue.
c. domestic producers lose, consumers gain, and the government gains revenue.
d. domestic producers lose, consumers gain, and the government loses revenue.
e. domestic producers lose, consumers lose, and the government gains revenue.

Answer 1

Option A

Step-by-step explanation:

A tariff refers to the tax on commodities imported from some other nation, enforced by one nation. By overfixing the value of commodities procured from another nation, tariffs are utilized to slowdown imports, doing them less demanding to domestic customers.

Governments might put such taxes to increase earnings or defend home sectors, particularly young ones. Nevertheless, tariffs may have unforseen consequences. By eliminating demand, they could even render domestic producers less productive and inventive. They will harm domestic markets, as a shortage of competitiveness continues to drive prices upwards.