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What explains the difference between a tax and a tariff?

  • Question 10c of 10 - Differences between taxes and tariffs

  • Maximum Attempts: 1
  • Question Type: Multiple Choice
  • Maximum Score: 2
  • Question: What explains the difference between a tax and a tariff?
  • Answers:
  1. Taxes are charged on income and wealth while tariffs are charged on sales.
  2. Taxes are a form of public revenues while tariffs are a form of public debt.
  3. Taxes are spent on social support programs while tariffs are spent on national defense.
  4. Taxes are paid on domestic economic activity while tariffs are paid on international trade.

The correct answer is: Taxes are paid on domestic economic activity while tariffs are paid on international trade. Taxes are collected internally while tariffs are collected on imports.

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