Which term describes a tax on imported goods?

Which term describes a tax on imported goods?

• A. Tariff
• B. Quota
• C. Subsidy
• D. Embargo

Answer: (A)

A tariff is a tax on imported goods. It raises the price of imports, making domestically produced items relatively cheaper and encouraging people to buy local. It also provides government revenue and can help protect developing industries. The other terms describe different trade controls: a quota limits the amount that can be imported; a subsidy is money given to domestic producers to support them; an embargo is a complete ban on trade with a country. Since the item describes a tax on imports, the tariff is the correct term.

A tariff is a tax on imported goods. It raises the price of imports, making domestically produced items relatively cheaper and encouraging people to buy local. It also provides government revenue and can help protect developing industries. The other terms describe different trade controls: a quota limits the amount that can be imported; a subsidy is money given to domestic producers to support them; an embargo is a complete ban on trade with a country. Since the item describes a tax on imports, the tariff is the correct term.