State the benefits of free trade and the effects of a tariff on domestic markets and consumption.

QUESTION 15
State the benefits of free trade on.
a. Price: Decrease (due to increased competition and efficiency)
b. Supply: Increase (due to a wider variety of goods and services from global sources)
c. Level of employment: Increase (in competitive, export-oriented industries)

PART C: Extended Response (Question 16)
State the effects (whether increase or decrease) on the following after a tariff is imposed.
a. Price of goods and services in the domestic market: Increase
b. Supply of locally produced goods and services: Increase
c. Demand for goods and services in the domestic market: Increase (for domestically produced substitutes)
d. Supply of imported goods and services: Decrease
e. General level of consumption in the economy: Decrease