Tariffs Flashcards
1
Q
Impact on domestic production
A
Expansion higher price / profit incentive
2
Q
Domstic demand
A
Conactionn. Tariffs raise prices
3
Q
Volume of imports
A
Reduction. Import substitution
4
Q
Government tax revenues
A
Higher. Tariffs raise revenues
5
Q
Domestic producer surplus
A
Increase. Higher price for each unit sold
6
Q
Domestic consumer surplus
A
Reduction. Increase prices for consumer
7
Q
Overall economic welfare
A
Reduction. Net loss of economic welfare
8
Q
Rate of consumer price inflation
A
Higher. Tariffs a source of cost-push inflation
9
Q
Short term rate of economic growth
A
Higher. Stimulates domestic output
