A tariff is a tax placed on
A)an exported good and it lowers the domestic price of the good below the world price.
B)an exported good and it ensures that the domestic price of the good stays the same as the world price.
C)an imported good and it lowers the domestic price of the good below the world price.
D)an imported good and it raises the domestic price of the good above the world price.

Question

Quizplus · Accepted Answer

A tariff is a tax placed on imported goods, and it is designed to raise the price of the imported good above the world price. This makes the domestic market more attractive to domestic producers, who can now sell their goods at a higher price than their foreign competitors. As a result, consumers end up paying more for the imported good while domestic producers enjoy higher profits.

A Tariff Is a Tax Placed on