Which of the following is a tariff?

Assessment: JAMB UTME - Economics - 1990 Subject: Economics

Question 1 Report

Which of the following is a tariff?
Answer Details
A tariff is a tax on imported goods. When a government imposes a tariff, it increases the price of the imported goods, making them less competitive in the domestic market. The purpose of a tariff is often to protect domestic industries by making foreign goods more expensive and encouraging consumers to buy domestic products instead. A limit on the amount of goods that can be imported is known as an import quota, not a tariff. An interest rate on foreign loans is simply the cost of borrowing money from a foreign source and is not related to the trade of goods. A government payment to domestic producers for exports is known as an export subsidy, which is a form of financial assistance given to domestic companies to encourage them to sell their products in foreign markets. Therefore, the correct answer is "tax on imported goods."

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