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Q.

A ____ is a tax imposed on imported goods.


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Detailed Solution

A tariff is a tax imposed on imported goods. A tariff is a tax on goods and services imported or exported to any country. Governments mostly use tariffs as instruments of trade barriers. They are imposed to increase the cost of imported goods. This makes it possible for domestic products to match the prices of imports. This helps the growth of domestic industries in the infant stage. This also restricts foreign countries from dumping their product in the country. Tariffs also serve as a source of income for the governments.
 
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