Question

How are subsidies similar to tariffs?

a) Both are types of taxes.
b) Both aim to lower the price of domestic goods.
c) Both are types of tax breaks and financial assistance.
d) Both allow domestic goods to compete against foreign goods, providing benefits for the international producer.
e) Both involve positive and negative incentives.

Answer 1

Subsidies and tariffs are trade policies that aim to protect domestic industries. They both help domestic goods compete against foreign goods by lowering the price of domestic products.

Step-by-step explanation:

Subsidies and tariffs are both trade policies that aim to protect domestic industries. While subsidies provide financial assistance and tax breaks to domestic producers, tariffs are taxes imposed on imported goods. Both subsidies and tariffs can help domestic goods compete against foreign goods by lowering the price of domestic products.