SSC MTS EXAM

Detailed explanation-1: -Tariffs increase the price of goods and services in domestic markets by applying a tax on imported goods that is paid by the domestic importer. To cover the increased costs, the domestic importer then charges higher prices for the goods and services.

Detailed explanation-2: -Tariffs have three primary functions: (1) to serve as a source of revenue; (2) to protect domestic industries; and (3) to remedy trade distortions (punitive function). The revenue function comes from the fact that the income from tariffs provides governments with a source of tax revenue.

Detailed explanation-3: -The primary benefit is that tariffs produce revenue on goods and services brought into the country. Tariffs can also serve as an opening point for negotiations between two countries. The GATT, WTO, and other trade agreements use regulation of tariffs as a way to bring nations together to determine economic policy.

Detailed explanation-4: -A tariff refers to the tax imposed by the government on imported goods from other countries.