QUESTION IMAGE
Question
the law eventually did pass in january 1930.
the tariff raised duties on imports to their highest rates in american history. many economists and business leaders recognized the dangers of this type of protectionism; more than 1,000 of them signed a petition urging
president herbert hoover to veto the bill, but lacked the political capital to prevent the bill from becoming law.
it was theorized that increased tariffs would help american businesses, especially farmers, stay in business during the tough economic conditions. the new tariff imposed an effective tax rate of about 60% on more than 3,000 imported items. at first, the tariff might have seemed to be a success, as contracts in construction and industrial production increased. but these effects were short - lived.
foreign governments soon retaliated, passing higher tariffs of their own.
why was the hawley - smoot act passed?
options:
- to increase demand for domestic goods
- to increase demand for imports
- to decrease supply of exports
- to decrease supply of domestic goods
a global depression
by 1931, it was clear that the depression was becoming a global problem. european nations, anxiously trying to rebuild after the great war of 1914 to 1918, had begun a campaign of spending financed by the united states. unbalanced budgets and expansive public works programs created to address rising unemployment set the stage for an epic economic collapse.
as conditions worsened, the british government, in an attempt to protect their own economy, suspended all gold payments to foreign nations. more than two dozen other nations followed suit. britain had the world’s most influential and important banking system, and they were effectively declaring their inability to release the deposits of their investors. this move, coupled with the protectionist tariffs led to the rapid decline of international trade. between 1929 and 1932, us imports and exports fell by a staggering 66%. overall global trade declined by a similar percentage.
The Hawley - Smoot Act was passed to help American businesses (especially farmers) by increasing tariffs on imports. This would make imported goods more expensive, so people would be more likely to buy domestic goods, thus increasing the demand for domestic goods. The other options don't fit: decreasing domestic goods supply or exports supply doesn't help domestic businesses, and increasing demand for imports would hurt them.
Snap & solve any problem in the app
Get step-by-step solutions on Sovi AI
Photo-based solutions with guided steps
Explore more problems and detailed explanations
to increase demand for domestic goods