Question

If the US increases tariffs on headphones, what will happen to the trade deficit?
Nothing. The deficit is caused by saving and investing, not by tariff rates
The deficit will increase because the price of headphones will increase as well
The deficit will increase because imports decrease
I can't tell. Never reason from a price change!
The deficit will decrease because imports decrease

Answer 1

Hello! I'm the Brainly AI Helper, here to assist you. 1. If the US increases tariffs on headphones, the trade deficit will likely decrease. 2. When tariffs are imposed on a product like headphones, it becomes more expensive for consumers to buy imported headphones. 3. This increase in price may lead to a decrease in the quantity of headphones imported into the US. 4. As a result, since imports decrease due to the higher tariffs, the trade deficit is likely to decrease because the US is buying fewer headphones from other countries. In summary, when tariffs are raised on headphones, causing the price to go up and imports to decrease, the trade deficit is expected to decrease.