Multiple Choice
Which type of trade barrier is a tax on imported goods?
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9. International Trade
Tariffs on Imports
Multiple Choice
Which of the following was NOT an outcome of the Underwood Tariff Act?
A
A significant reduction in tariff rates on imported goods
B
The introduction of a federal income tax to compensate for lost tariff revenue
C
An increase in protection for domestic industries through higher tariffs
D
Greater competition from foreign producers in the U.S. market
Verified step by step guidance1
Step 1: Understand the historical context of the Underwood Tariff Act, which was enacted in 1913 to reduce tariff rates and promote free trade.
Step 2: Recognize that the Act significantly lowered tariffs on many imported goods, aiming to reduce protectionism and encourage competition.
Step 3: Note that to offset the revenue loss from lower tariffs, the Act introduced a federal income tax, authorized by the 16th Amendment.
Step 4: Identify that the Act did not increase protection for domestic industries; instead, it reduced tariffs, which means it did not raise tariffs to protect domestic producers.
Step 5: Conclude that the outcomes of the Act included lower tariffs, introduction of income tax, and increased foreign competition, but not higher tariffs or increased protectionism.
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