Answer the following statements true (T) or false (F)

Question

1. A revenue tariff is designed to protect domestic products from foreign imports by raising the price of the latter. 
2. An import quota is a trade barrier in the form of a customs duty, or tax, levied mainly on imports. 
3. Dumping is the practice of a foreign company exporting products abroad at a lower price than the price in the home market, or even below the costs of production, in order to drive down the price of the domestic product. 
4. Cuban cigars and sugar cannot legally be imported into the United States because of a trade embargo. 

Answer 1

1. FALSE
There are two types of tariffs: One is designed simply to raise money for the government (revenue tariff). The other is to raise the price of imported goods to make the prices of domestic products more competitive (protective tariff).
2. FALSE
An import quota is a trade barrier in the form of a limit on the numbers of a product that can be imported. Its intent is to protect domestic industry by restricting the availability of foreign products.
3. TRUE
Dumping is the practice of a foreign company exporting products abroad at a lower price than the price in the home market, or even below the costs of production, in order to drive down the price of the domestic product.
4. TRUE
An embargo is a complete ban on the import or export of certain products such as the U.S. ban on Cuban cigars and sugar.