1
QuizMultiple Choice

Trade Barriers

Question 1 • GA-GSE Personal Finance and Economics

Tariffs and subsidies are both examples of

Answer
m
monetary restrictions for the domestic producer.
e
economic benefits for the consumer.
e
economic benefits for the international producer.
i
incentives—one positive and one negative.

Explanation

A subsidy gives financial support to encourage a producer to make or sell more, so it is a positive incentive. A tariff raises the cost of imported goods, discouraging imports and serving as a negative incentive for international producers. Therefore, tariffs and subsidies are incentives—one positive and one negative.

AI-written and checked against the verified answer.

Next