GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A sudden shift from import tariffs to free trade may induce short-term unemployment in
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Import-competing industries
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Industries that are only exporters
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Industries that neither import nor export
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Industries that sell domestically as well as export
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Explanation:
Detailed explanation-1: -Tariffs increase the prices of imported goods. Because of this, domestic producers are not forced to reduce their prices from increased competition, and domestic consumers are left paying higher prices as a result.
Detailed explanation-2: -When a country imposes a tariff, foreign exporters have greater difficulty in selling their products. As their exports decline, they may cut prices in order to keep their sales from falling drastically. Thus, for example, when a tariff of $10.00 is imposed, foreign exporters may cut their price by, say, $6.00.
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