One of the Main Purposes of a Tariff Is to

question 205

Multiple Choice

One of the main purposes of a tariff is to

• A) raise the price of an import above the world price.
• B) compensate importers for losses due to fluctuating exchange rates.
• C) reduce the price of imports to make them more affordable.
• D) increase the supply of imports.

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Definitions:

Price Sensitive

Being price sensitive means the demand for a product or service is highly influenced by changes in its price, where consumers may alter their buying habits significantly in response to pricing adjustments.

More Inelastic

A description of a product or service demand that is less sensitive to price changes compared to others.

Complement Good

A product that is typically consumed together with another product, increasing the demand for both.

Substitute Good

A product or service that a consumer can use in place of another product or service.