If Higher Tariffs, Such as Those Enacted by the Smoot-Hawley

question 93

Multiple Choice

If higher tariffs, such as those enacted by the Smoot-Hawley trade bill, reduce the imports of the United States, which of the following will be most likely to occur?

• A) U.S. employment will increase.
• B) The unemployment rate of the United States will decline.
• C) U.S. exports will increase because foreigners will want to buy more from U.S. producers.
• D) U.S. exports will decline because foreigners will be earning fewer of the dollars needed to purchase goods and services from Americans.

---

Definitions:

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical.

Monopolies

Market structures characterized by a single seller controlling a large portion of the market and the lack of viable competition.

Long-run Equilibrium

A state in which all factors of production and market forces are in balance, with no external pressures prompting change.

P = MR

An equality indicating that a firm's price (P) is equal to its marginal revenue (MR), often associated with perfect competition and profit maximization strategies.