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6.4 Trade Barriers

Question 3 • GA-GSE Personal Finance and Economics

The United States government gives [___] to some industries in the form of direct payments or loans. As a result, producers can sell these products at a [___] price while still making a profit.If the government wants to discourage consumers from purchasing imported goods, a [___] can be created to tax imports.

Answer
A
tariff
B
subsidy

Explanation

A tariff is a tax placed on imported goods, so it can make imports more expensive and discourage consumers from buying them. A subsidy is financial support, such as direct payments or loans, given to producers; it is not a tax on imports.

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