What is a Tariff?

Which of the following best describes the primary purpose of a tariff?

• 
  

  To increase government spending on infrastructure

• To reduce domestic production costs

• To eliminate all international trade

• To encourage domestic production by taxing imports

On the surface, what would be the MOST likely response to the tariff imposed on Japanese cars?

• Americans would stop buying vehicles

• Americans would buy more American-made vehicles

• Americans would refuse to buy American-made vehicles

• Americans would only buy cars imported from Japan

Which of the following is NOT a type of tariff?

• Ad Valorem

• Compound

• Specific

• Tactical

Identify the reasons a nation might impose a tariff. Check ALL that apply.

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  To help lower the cost of goods and services for consumers

• To protect domestic industries

• To raise revenue for the government

• As part of a trade war

Which of the following statements regarding raising tariffs is TRUE? Check ALL that apply.

• Will lead to an increase in prices for consumers

• 
  

  Domestic companies that rely on imported materials to produce their goods may experience increased production costs

• Often disrupts global supply chains

• Overprotection of domestic businesses can lead to a false sense of security