When a nation removes tariffs on imported products that nation will

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BlackTom AI · Accepted Answer

To analyze this question, start by considering the economic impact of removing tariffs on imports. Tariffs raise the domestic price of imported goods and often reduce the quantity imported, protecting domestic producers but increasing overall prices for consumers. When tariffs are removed, competition from cheaper foreign goods typically lowers prices and increases the variety and availability of goods, which tends to boost overall consumption.

Option 1: 'experience higher prices and consume higher quantities.' This is inconsistent with tariff removal. Lowering or removing tariffs tends to reduce prices, not raise them; while consumption often rises, the premise of higher prices is incorrect, making this option implausible.

Option 2: 'experience lower prices and consume higher quantities.' This aligns with standard economic expectations: lower prices due to increased competition encourage more purchases, so both lower prices and higher consumption are plausible outcomes of tariff removal.

Option 3: 'experience higher prices and consume lower quantities.' This reverses the expected price effect and also contradicts the typical response of consumers who would not reduce quantity when prices rise under tariff elimination.

Option 4: 'experience lower prices and consume lower quantities.' While the price effect is correct, the consumer response is unlikely: lower prices generally stimulate greater consumption rather than a drop in quantity demanded.

In summary, only the second option accurately captures the usual market response to tariff removal by reducing prices and increasing consumption, while the other choices misstate the price effects or the consumption response.

When a nation removes tariffs on imported products that nation will

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When a nation removes tariffs on imported products that nation will

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Tariffs artificially goods' prices and goods' demand.