The correct option for the resultant from US tariff on imported cars.
Answer to Problem 3MCQ
Option b is correct.
Explanation of Solution
Explanation for the correct option:
b.
Due to US tariffs the product cost that is imported from abroad increases. If a car is imported, then US tariffs will increase its price which is to be paid by the customer. Therefore, option b is correct.
Explanation for incorrect options:
a.
Profit for US car manufacturers will remain unaffected. Therefore, option a is the incorrect answer.
c.
Fewer cars would be imported due to higher prices. Therefore, option c is incorrect.
d.
Due to the high prices of imported cars, not everyone can afford imported cars which will not affect the demand for US-manufactured cars. Therefore, option d is incorrect.
e.
Due to high prices because of US tariffs cars from all sources cannot be traded. Therefore, option e is incorrect.
International trade: International trade is an exchange of goods and services across nations. This is due to globalization and
Chapter 44 Solutions
Krugman's Economics For The Ap® Course
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