Question

Tariffs create a(n) ___________ pressure on domestic prices.

Select the correct answer below:
A. upward
B. downward
C. constant
D. negligible amount of

Answer 1

Answer: A. upward

Explanation:

Tariffs are taxes that a Government imposes on imported goods in a bid to protect local producers that are making the same goods.

When a Tariff is implemented, it will make goods from outside more expensive as well as give domestic producers an opportunity to charge higher prices as imports have become more expensive.

Both of these results will pull the domestic prices up.