Which statement about tariffs is true?

Which statement about tariffs is true?

• A. Tariffs are taxes on exports.
• B. Tariffs can be used to raise revenue for the government.
• C. Tariffs always reduce the cost of imported goods.
• D. Tariffs have no impact on consumer prices.

Answer: (B)

Tariffs are taxes on goods imported into a country. They can be used to raise revenue for the government, which is why this statement is true. Since tariffs target imports, not exports, the idea that they are taxes on exports is incorrect. Tariffs typically raise the price of imported goods, so they do affect consumer prices (contrary to the claim that they always lower costs or have no impact). In sum, tariffs can function as a revenue source for the government, making that option the best choice.

Tariffs are taxes on goods imported into a country. They can be used to raise revenue for the government, which is why this statement is true. Since tariffs target imports, not exports, the idea that they are taxes on exports is incorrect. Tariffs typically raise the price of imported goods, so they do affect consumer prices (contrary to the claim that they always lower costs or have no impact). In sum, tariffs can function as a revenue source for the government, making that option the best choice.