The policy mechanism that raises the cost of imported agricultural goods to protect domestic producers is what?

The policy mechanism that raises the cost of imported agricultural goods to protect domestic producers is what?

• A. Tariffs
• B. Subsidies
• C. Quotas
• D. Export Restrictions

Answer: (A)

Raising the cost of imported goods to shield domestic producers comes from taxing imports. Tariffs add a tax on imported agricultural products, so foreign goods cost more in the domestic market. That higher price lowers foreign competition and helps local producers by making their products comparatively cheaper. The extra revenue from the tariff can also fund public goals. Subsidies work differently: they provide payments to domestic producers to lower their costs, not raise import prices. Quotas restrict how much can be imported, which can raise prices through limited supply but via quantity limits rather than a tax on each unit. Export restrictions affect what can be sent abroad, not the price of imports at the domestic border.

Raising the cost of imported goods to shield domestic producers comes from taxing imports. Tariffs add a tax on imported agricultural products, so foreign goods cost more in the domestic market. That higher price lowers foreign competition and helps local producers by making their products comparatively cheaper. The extra revenue from the tariff can also fund public goals.

Subsidies work differently: they provide payments to domestic producers to lower their costs, not raise import prices. Quotas restrict how much can be imported, which can raise prices through limited supply but via quantity limits rather than a tax on each unit. Export restrictions affect what can be sent abroad, not the price of imports at the domestic border.