Answer:
The primary motivation of tariffs is to raise the price of imports, protecting domestic goods and industries from foreign competition. Option (B) is true.
Step-by-step explanation:
The primary motivation of tariffs is to raise the price of imports, and this is often done to protect domestic goods and industries.
Protection of Domestic Industries:
Tariffs are taxes imposed on imported goods, making them more expensive for consumers in the importing country.
By doing so, tariffs aim to give a competitive advantage to domestic industries by making foreign goods relatively more expensive.
Price Increase on Imports:
When tariffs are applied, the cost of importing goods increases due to the added tax.
As a result, the prices of foreign goods become higher compared to domestically produced goods, encouraging consumers to choose local products.
Protection Against Foreign Competition:
Tariffs are often implemented to shield domestic industries from foreign competition.
This protection is especially relevant when a country's industries face challenges such as lower production costs in other countries, potentially leading to an influx of cheaper imports.
Revenue Generation (Secondary Motivation):
While the primary motivation is to protect domestic industries, tariffs can also generate revenue for the government.
The revenue collected from tariffs can be used to fund government activities, although this is often a secondary consideration compared to the protectionist objective.
Encouraging Domestic Consumption:
By making imported goods more expensive, tariffs aim to encourage consumers to prefer domestically produced goods.
This can support local industries, preserve jobs, and contribute to the overall economic well-being of the importing country.
Addressing Trade Imbalances:
Tariffs can also be used as a tool to address trade imbalances.
By making imports more expensive, a country may seek to reduce its trade deficit by encouraging domestic production and consumption.
Thus, Option (B) is true.