Which term is defined as a tax on imported goods?

Which term is defined as a tax on imported goods?

• A. Quota
• B. Tax
• C. Tariff
• D. Embargo

Answer: (C)

A tariff is a tax on imported goods. Governments impose tariffs to raise revenue and to make domestic products more competitive by increasing the price of foreign items. This differs from a quota, which limits how many imports can come in; an embargo, which bans trade with a country; and general taxes that apply to goods regardless of origin. When a tariff is added, importers pay the duty to bring the product in, often making the imported option more expensive and encouraging domestic consumption.

A tariff is a tax on imported goods. Governments impose tariffs to raise revenue and to make domestic products more competitive by increasing the price of foreign items. This differs from a quota, which limits how many imports can come in; an embargo, which bans trade with a country; and general taxes that apply to goods regardless of origin. When a tariff is added, importers pay the duty to bring the product in, often making the imported option more expensive and encouraging domestic consumption.