Answer to Question #93854 in Macroeconomics for Nomthandazo

Question

Which of the following statements regarding the import tariff is/are correct? a. A specific import tariff benefits the domestic producers by reducing both the domestic price and the quantity of imports. b. A specific import tariff increases the domestic supply of a good and reduces its domestic price. c. An introduction of the tariff reduces the quantity demanded of a good and increases its domestic price. [1] Only a and b [2] Only a [3] Only c [4] Only b [5] None of the statements are correct

Answer 1

The answer is 5 - None of the statements are correct.

Import duties have two distinct purposes: raise income for the local government and to give a market advantage to locally grown or produced goods that are not subject to import duties. A third related goal is sometimes to penalize a particular nation by charging high import duties on its products.

https://www.investopedia.com/terms/i/import-duty.asp