What is the main goal of a protective tariff?

Study for the VirtualSC Economics Honors Exam. Utilize flashcards and multiple-choice questions, each with hints and explanations. Get prepared for your exam!

The main goal of a protective tariff is to protect domestic industries. A protective tariff is a tax imposed on imported goods with the intention of making those goods more expensive compared to local products. By raising the price of foreign goods, the tariff encourages consumers to buy domestically produced items instead, which can help nurture and support local businesses and industries. This strategy is often employed by governments to prevent foreign competition from undermining domestic producers, thereby preserving jobs and ensuring the viability of local markets.

The other options do not align with the primary intent of a protective tariff. Reducing government spending and lowering prices for consumers are not the direct objectives of such tariffs. Similarly, while protective tariffs may have an indirect effect on exports, their main purpose is not to increase exports but rather to safeguard local industries from international competition.

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