Understanding Tariffs: A Comprehensive Quiz

What is a tariff?

• A tax imposed on domestic goods

• A tax imposed on imported goods and services

• A subsidy for exported goods

• A fee for domestic services

Why do governments impose tariffs?

• To encourage imports

• To decrease domestic revenue

• To protect foreign industries

• To raise revenue and protect domestic industries

What is a specific tariff?

• A tax on domestic goods

• A fixed fee based on the type of item

• A subsidy for exports

• A tariff based on the item's value

What is an ad-valorem tariff?

• A subsidy for imports

• A fixed fee based on the type of item

• A tax on domestic services

• A tariff based on the item's value

Which of the following is an unintended side effect of tariffs?

• Lower consumer prices

• Higher export rates

• Reduced domestic innovation

• Increased competition

What was one reason for the tariffs imposed by President Donald Trump in 2018?

• To increase foreign imports

• To reduce government revenue

• To decrease the trade deficit

• To lower domestic production

How can tariffs support a nation's goals?

• By reducing government revenue

• By ensuring domestic products receive preference

• By making foreign goods cheaper

• By increasing foreign competition

What is one disadvantage of tariffs?

• They always lower consumer prices

• They can initiate trade wars

• They increase domestic innovation

• They reduce government revenue

What economic theory argues against tariffs?

• Mercantilism

• Comparative advantage

• Isolationism

• Protectionism

What historical event was influenced by a tariff on tea?

• The American Civil War

• The Boston Tea Party

• The Industrial Revolution

• The French Revolution