If an economy experiences a persistent balance of trade deficit, it may choose to place tariffs on imports of manufactured goods.
When might the use of tariffs solve a balance of trade deficit in the long term?
1 )
when an economy imports a sustainable amount of raw materials
2 )
when an economy is experiencing a high rate of inflation
3 )
when the demand for imports is inelastic
when the supply of domestically produced goods is elastic
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