In the World View Article on New Tariffs on Imported

question 27

Multiple Choice

In the World View article on new tariffs on imported tires from China, the tariff is designed to

• A) Protect U.S.-based import-competing industries.
• B) Protect U.S. tire distributors.
• C) Protect U.S. tire consumers.
• D) Protect Chinese workers who produce tires.

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Definitions:

Capital Formation

The process of building up the stock of physical and financial assets in an economy, often through investment in productive assets.

Autonomous Consumption

The level of consumption that occurs when income is zero; it represents the expenditures that consumers must make even when they have no income.

Induced Consumption

Consumer spending that increases when income increases, and decreases when income decreases, reflecting behavioral responses to changes in income.

Disposable Income

The amount of money left for households to use on saving and spending after income taxes are covered.