ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Decreases demand, decreases supply
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Increase demand, increase supply
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Decrease demand, increase supply
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Increase demand, decrease suppy
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Detailed explanation-1: -When you reduce tariffs and reduce prices, it reduces wage demands. And when you reduce wage demands, that leads to subsequent reductions in prices and contributes to further disinflation.
Detailed explanation-2: -A tariff is a tax levied on an imported good with the intent to limit the volume of foreign imports, protect domestic employment, reduce competition among domestic industries, and increase government revenue.
Detailed explanation-3: -A tariff (a tax on imports) reduces both domestic supply and demand, and results in a quantity of government revenue.
Detailed explanation-4: -Tariff Basics As a protectionist tool, a tariff increases the prices of imports. As a result, consumers would choose to buy the relatively less expensive domestic goods instead.