💼 Pre-MBA Exam Prep

A tariff on imports:

A Lowers domestic prices
B Raises the domestic price of imported goods, protects domestic producers, and generates government revenue
C Increases imports
D Has no economic effect

✓ Correct Answer: Option B

Tariff effects: raises price of imports → domestic producers gain (more competitive), consumers lose (higher prices), government gains revenue, deadweight loss to society.

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