Question

How do tariffs on imports affect a country’s balance of trade?
a.
Tariffs raise government revenue.
b.
Tariffs ensure that all countries are traded with equally.
c.
Tariffs reduce the amount of imports a country makes.
d.
Tariffs increase the amount of money a country makes from imports.

Answer 1

c. Tariffs reduce the amount of imports a country makes.

Explanation: Tariffs raise the price of imported goods, which tends to reduce import volumes and can improve the balance of trade (exports − imports). (Option a is true but relates to government revenue, not directly to the trade balance.)