General Education Development (GED) Practice Exam

What is the primary goal of a government that implements an import tariff on consumer electronics?

1. To protect its domestic consumer electronics industry from competition

2. To decrease the cost of imported consumer electronics

3. To discourage domestic companies from producing consumer electronics

4. To increase competition and lower prices in the industry

The correct answer is: To protect its domestic consumer electronics industry from competition

The primary goal of implementing an import tariff on consumer electronics is to protect the domestic consumer electronics industry from competition. An import tariff is essentially a tax imposed on imported goods, which increases their cost in the local market. This makes foreign-made electronics more expensive relative to those produced domestically. By raising the price of imported products, the government aims to encourage consumers to purchase locally manufactured goods instead, thus supporting domestic companies and helping to maintain jobs and production capabilities within the country. This strategy is often employed in an effort to foster a competitive domestic market, protect local jobs, and boost the economy. As a result, the tariff serves as a protective measure that seeks to limit foreign competition, ensuring that local manufacturers can thrive.