Which of the following statements is true of tariffs?
A) They are the major source of government revenue in developed nations.
B) They increase products' appeal to buyers.
C) They lower the effective prices of imports.
D) They protect domestic producers.

Question

Quizplus · Accepted Answer

Tariffs are taxes on imported goods, and their primary purpose is to protect domestic producers from foreign competition. By increasing the cost of imported goods, tariffs make it more expensive for consumers to buy foreign products and therefore give an advantage to domestic producers who don't have to pay the same taxes on their goods. While tariffs can generate some revenue for governments, they are typically not a major source of income for developed nations. Tariffs also do not increase products' appeal to buyers, nor do they lower the effective prices of imports.

Which of the Following Statements Is True of Tariffs