Question

question
which of the following is a difference between a tariff and a subsidy?
answer
tariffs include direct cash payments, whereas subsidies involve low - interest loans.
a tariff is the ability to purchase inventory and supplies on credit without interest, whereas subsidies involve low - interest loans.
a tariff is a tax imposed on an imported good or service, whereas a subsidy consists of government financial assistance to domestic producers.
tariffs include tax concessions, whereas subsidies are imposed on imported goods or services.
i dont know yet

Explanation:

To determine the difference between a tariff and a subsidy, we analyze each option:

• First option: Tariffs are not direct cash payments, and subsidies are not low - interest loans. Eliminate.
• Second option: A tariff has nothing to do with purchasing inventory on credit. Eliminate.
• Third option: A tariff is a tax on imported goods/services, and a subsidy is government financial help to domestic producers. This matches the economic definitions.
• Fourth option: Tariffs are taxes (not tax concessions) on imports, and subsidies are not imposed on imports. Eliminate.

Answer:

C. A tariff is a tax imposed on an imported good or service, whereas a subsidy consists of government financial assistance to domestic producers.