Question

Which is true regarding tariffs?

(Select all that apply.)

Tariffs can promote free trade.
Tariffs can lead to a trade freeze.
Tariffs can raise revenue for the government.
Tariffs can lead to lower consumer costs.

Answer 1

The correct answers are,

• Tariffs can lead to a trade freeze.
• Tariffs can raise revenue for the government.

Step-by-step explanation:

tariffs are commonly seen as a barrier to the international free trade. However, there are several reasons behind imposing tariffs.

First, if the government of a particular nation require extra tax revenue, they will increase tariffs in a bid to increase it.

Second, to protect the local industries and enterprises from foreign competition.

However, the downside of this is that the cost of imports could go high, preventing people of a nation from consuming better quality foreign goods. Also, the trade between nations will be discouraged as well.