How are subsidies similar to tariffs?

A. Both are types of taxes.
B. Both aim to lower the price of domestic goods.
C. Both are types of tax breaks and financial assistance.
D. Both allow domestic goods to compete against foreign goods.

Subsidies and tariffs are trade barriers affecting international trade, with domestic policies capable of replicating the effects of tariffs or subsidies.

Explanation:

Subsidies and tariffs are both trade barriers that impact international trade. While tariffs are taxes on imported products aiming to limit trade, subsidies are financial assistance to domestic manufacturers that reduce costs and limit imports. Interestingly, a combination of domestic policies like a production subsidy and a consumption tax can mimic the effects of a tariff or an export subsidy.

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How are subsidies similar to tariffs?A. Both are types of taxes.B. Both aim to lower the price of domestic goods.C. Both are types of tax breaks and financial assistance.D. Both allow domestic goods to compete against foreign goods.

Answer :

Final answer:

Explanation:

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Other Questions

How are subsidies similar to tariffs?

A. Both are types of taxes.
B. Both aim to lower the price of domestic goods.
C. Both are types of tax breaks and financial assistance.
D. Both allow domestic goods to compete against foreign goods.