Understanding Tariffs and Their Impact

What is a tariff?

• A tax on imported goods

• A subsidy for local businesses

• A fee for domestic products

• A discount on exported goods

Why might a government impose a tariff on imported cars?

• To decrease domestic car prices

• To encourage the purchase of foreign cars

• To generate revenue and support local industries

• To reduce the number of cars on the road

How do tariffs typically affect consumer prices?

• They stabilize prices in the market

• They increase prices for consumers

• They have no effect on prices

• They lower prices for imported goods

What is a potential consequence of a trade war?

• Higher prices and fewer choices for consumers

• Lower tariffs on all goods

• More imported goods available

• Increased cooperation between countries

What is a common effect of tariffs on imported electronics?

• Higher prices due to increased costs

• No change in the market

• Increased availability of products

• Lower prices for consumers

Why do governments use tariffs despite their impact on consumer prices?

• To increase competition from foreign markets

• To make imported goods cheaper

• To protect domestic industries and jobs

• To reduce government revenue

What is one potential benefit of tariffs for local businesses?

• Decreased demand for their products

• Increased competition from imports

• Higher costs for raw materials

• Opportunities to fill gaps left by expensive imports

Which of the following is NOT a reason for imposing tariffs?

• To protect local jobs

• To use as leverage in trade negotiations

• To increase foreign competition

• To generate government revenue

How can consumers minimize the impact of tariffs on their budgets?

• By ignoring price changes

• By staying informed and adjusting spending habits

• By avoiding all shopping

• By only buying imported goods

What is one strategy consumers can use to cope with rising prices due to tariffs?

• Buying more imported goods

• Ignoring budget constraints

• Supporting local businesses

• Waiting for prices to increase further