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AP® Macroeconomics

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Effects of Eliminating Tariffs

APMACR-HBUSD4

Imagine the United States is operating at an exact balance of trade. Then, the United States government eliminates all tariffs. All of the following would be likely effects of this policy EXCEPT:

A

American consumers would enjoy lower prices and more choices of consumer goods.

B

Some American companies would benefit while other American companies would be hurt.

C

The international value of the US dollar would increase in the foreign exchange market.

D

Imports into the United States would increase.

E

The real gross domestic product of the United States would decrease.