Many People Argue That the Imposition of Tariffs in Industry

question 57

Multiple Choice

Many people argue that the imposition of tariffs in industry X will increase factor incomes in that industry and therefore be good for the country as a whole. The counter- argument is that

• A)factor incomes overall would increase, but wages in industry X would fall, which would hurt workers in that industry.
• B)the increase in factor incomes would increase unemployment.
• C)the increase in factor incomes in industry X would reduce profits to business owners by an equal amount.
• D)the increase in industry X factor incomes would be more than offset by reductions in real incomes to all other domestic residents.
• E)factor incomes would first rise and then decrease in industry X.