A sudden shift from import tariffs to free trade may induce short-term unemployment in ?
Correct answer: A. Import-competing industries
- A. Import-competing industries
- B. Industries that are only exporters
- C. Industries that sell domestically as well as export
- D. industries that neither import nor export
Explanation
Removing tariffs exposes import-competing industries to cheaper foreign goods, so they may reduce output and employment in the short run. Export industries generally gain rather than lose from freer trade.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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