QCAA Economics Practice Questions - QCAA Economics External Assessment (Queensland) Exam

When a government imposes a tariff on an imported good, what is the immediate effect on the domestic market?

Domestic price falls, domestic production increases, and imports increase. Domestic price rises, domestic production decreases, and imports increase. Domestic price rises, domestic production increases, and imports decrease. Domestic price falls, domestic production decreases, and government tax revenue decreases.

Correct Answer:

Domestic price rises, domestic production increases, and imports decrease.

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