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Companies generally decide to expand globally to increase their:
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1. Introduction to Microeconomics
Introduction to Economics
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In the context of international trade, a tariff is a type of:
A
tax
B
punishment
C
subsidy
D
grant
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Understand the definition of a tariff in international trade: A tariff is a fee or tax imposed by a government on imported goods.
Recognize that tariffs increase the cost of imported goods, making them more expensive compared to domestic products.
Identify that a tariff is not a punishment, subsidy, or grant, but rather a form of taxation on imports.
Recall that a subsidy is a financial aid given to support domestic producers, which is the opposite of a tariff.
Conclude that the correct classification of a tariff is a tax, as it generates revenue for the government by taxing imports.
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