Lumber can be produced in Canada at a lower cost than in the U.S. When Canadian lumber is shipped into the U.S., its price is raised about 20% to allow the U.S. lumber industry to remain competitive. This is accomplished through a(n) _______
A) tariff
B) quota
C) embargo
D) subsidy

Question

Quizplus · Accepted Answer

A tariff is a tax imposed on imported goods. In this case, a tariff is levied on Canadian lumber imports to the U.S. to raise its price by 20% and make it competitive with domestically produced lumber. This helps to protect the U.S. lumber industry from being undercut by cheaper imported lumber.

Lumber Can Be Produced in Canada at a Lower Cost