Question

A decrease in the import tariff will result in

Question options:

	an increase in imports but a decrease in domestic production.
	a decrease in price and a decrease in quantity purchased.
	a decrease in imports but an increase in domestic production.
	an increase in price but a decrease in quantity purchased.

Which of the following is NOT a rationale for tariffs?

Question options:

	They improve the terms of trade for small and large nations.
	They promote a level playing field in terms of trade.
	They protect jobs and reduce unemployment.
	They promote growth and development of young industries.

President Donald Trump declared a 20 percent border tax on imports from Mexico to pay for the border wall. Which is the MOST likely effect of the border tax?

Question options:

	Both Mexico and America will pay for the wall.
	It will result in American consumers paying for the wall.
	Mexico will avoid paying for the wall by raising their prices.
	It will result in Mexico paying for the wall.

Answer 1

1. A fall in import tariff makes imports cheaper. This leads to an increase in imports and as a result of this, the domestic production falls as now more is imported than domestically produced. Thus, option A is correct.