DECA Marketing Cluster Practice Exam

What is a tariff in a business context?

1. A method of product promotion

2. A tax on imports and exports

3. A type of marketing strategy

4. A fee for using certain services

The correct answer is: A tax on imports and exports

A tariff is defined as a tax imposed on imports and exports. This tax is levied by a government on the value of goods that are brought into or taken out of a country, which can influence trade between nations. By imposing tariffs, a government can protect its domestic industries from foreign competition by making imported goods more expensive, thereby encouraging consumers to purchase locally produced items. Tariffs can also be used as a tool to generate revenue for the government. Understanding tariffs is essential in the context of international trade and economics, as they play a significant role in shaping trade policies and affecting market dynamics. The other options do not accurately represent what a tariff is or its function in a business context; they relate more to marketing strategies or service-related fees, which are distinct concepts separate from the taxation of traded goods.