Answered

Which of the following is a likely effect of creating high tariffs?

A. It would not affect the relationships between nations.
B. It would positively affect the relationships between nations.
C. It would lead to the importing nation creating higher tariffs as well.
D. It would promote business deals with other nations to buy their products.



Answer :

GinnyAnswer

Final answer:

A tariff on imports in a large importing country decreases the welfare of producers in that country, affecting consumer and producer surpluses.


Explanation:

Decrease is the effect of a tariff on the welfare of producers of the product in the large importing country. When a large importing country imposes a high tariff on imported goods, it leads to a decrease in consumer surplus in the import market and a rise in the exporting country's consumer surplus. This results in an increase in producer surplus in the importing country but a decrease in the export country.


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