Which of the Following Statements About a Tariff Is True

question 4

Multiple Choice

Which of the following statements about a tariff is true?

• A) It limits the quantity of products imported into an economy.
• B) It increases the sales of products from abroad in a country.
• C) It is a tax on foreign products.
• D) It occurs in a free trade area.

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Definitions:

Price Elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good to a change in its price.

Tax

A financial charge or levy imposed by a government on individuals or entities to fund public services and government spending.

Inefficiency Costs

The costs associated with not utilizing resources in the most productive manner, which can lead to increased operational expenses and reduced profitability.

Elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good or service to a change in one of its determinants, such as price or income.