A charge of 12-18 percent is levied by the government of a foreign nation on the value of automobile accessories imported from a neighboring country. This increased the price of those imported car accessories for the consumers. This foreign nation is using a (n)

Question

Social Studies

Justine Allison

28 June, 14:59

A charge of 12-18 percent is levied by the government of a foreign nation on the value of automobile accessories imported from a neighboring country. This increased the price of those imported car accessories for the consumers. This foreign nation is using a (n)

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Answers (1)

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Kaelyn Morris · Answer 1

The foreign nation is using a tariff

Explanation:

A Tariff is a tax levied on imported goods. In this example, the tariff goes from 12% to 18% of the value of the good. The main reasoning behind tariffs is to lower the demand for imported goods, and increase the demand for local goods. However, the ast majority of economists agree that tariffs reduce the supply of goods, and hence, result in higher prices for consumers.