Tariffs Result in a Decrease in Consumer Surplus Because

question 114

Multiple Choice

Tariffs result in a decrease in consumer surplus because:

• A)​the price and the quantity consumed of the protected good increases.
• B)​the price and the quantity consumed of the protected good decreases.
• C)​the price of the protected good increases and quantity consumed decreases.
• D)​the price of the protected good decreases and quantity consumed increases.

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, determining the cost of borrowing or the return on savings.

Money Supply

The total amount of money available in an economy at a specific time, including cash and deposits.

Opportunity Cost

Sacrificing the chance to gain from other alternatives by committing to one choice.

Real Interest Rate

The interest rate adjusted for inflation, representing the true cost of borrowing and the real yield to lenders or investors.