When a government enacts an import tariff, which of the following groups is positively impacted?

• A. Foreign exporters
• B. Domestic consumers
• C. Domestic producers
• D. Government (through tariff revenue)

Answer: (D)

Verified step by step guidance

1. Understand what an import tariff is: it is a tax imposed by the government on goods imported from other countries, which raises the price of imported goods in the domestic market.
2. Analyze the effect on domestic producers: since imported goods become more expensive due to the tariff, domestic producers face less competition and can sell more at higher prices, benefiting them.
3. Consider the impact on domestic consumers: they face higher prices for imported goods and possibly domestic substitutes, which generally makes them worse off, not better.
4. Evaluate the effect on foreign exporters: the tariff makes their goods more expensive in the domestic market, reducing their sales and negatively impacting them.
5. Recognize the government's role: the tariff generates revenue for the government because importers must pay the tax on each unit imported, which is a positive impact for the government.