1) Why does the tariff decrease new solar installations in the United States?
The tariff ____________ the price of solar modules, which decreases ____________.
Wrong! - How does the price of solar modules change when a tariff is applied? Does the price rise or fall? How does a tariff change U.S. production and U.S. consumption?
Correct! - The tariff raises the price of solar modules to the world price plus tariff. At the higher price, U.S. production increases, U.S. consumption decreases, and imports decrease. With fewer solar modules available, solar installations in the United States decrease.