Chapter 19, Problem 7AA

To determine

To Choose: The term that best completes the given sentence.

Answer to Problem 7AA

The term that best completes the given sentence is substitutes.

Explanation of Solution

There are various factors that can affect international trade like natural resources, labor endowment, exchange rate, tariff etc. Usually, Tariffs are used to protect domestic industries which fight overseas competition or unfair practices like dumping and foreign subsidies. Tariffs are the crucial barriers to free trade; they can frequently make against cheap imports to protect the domestic industry. This often results in retaliation, however, with other nations putting tax on the goods exported. The tariff has led to a fall in imports

Economics Concept Introduction

Introduction: Tariffs are taxes. It adds to the expenses of the goods that is imported and is one such policies of trade that an economy can impose. Tariffs are payable to the customs authorities in the country which is imposing the tariff.