When the U.S. government determined the prices of solar panels imported from China were artificially low due to illegal subsidies, it imposed a ________ to help domestic firms compete.

Question

Quizplus · Accepted Answer

The term "imposed" suggests that a government action has been taken to address the artificially low prices due to illegal subsidies. A quota limits the amount of a good that can be imported, but this does not necessarily address the issue of artificially low prices. Countertrade exchange involves non-monetary exchanges of goods, so it is not relevant here. A comparative inflation rate and currency exchange rate are also not relevant, as they do not directly address the issue of illegal subsidies. Thus, a tariff, which is a tax on imported goods, is the best choice to help domestic firms compete.