Tariff Definition Quiz

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Questions and Answers

What is the primary purpose of a customs tariff or duty?

  • To promote free trade and open markets
  • To protect domestic industries from foreign competition
  • To generate revenue for the government (correct)
  • To control the flow of illegal goods across borders

Which of the following best describes the concept of a 'customs schedule'?

  • The process of calculating the total amount of customs duties owed
  • A system for tracking the movement of goods through customs
  • A list of imported goods and their corresponding tariff rates (correct)
  • A schedule of events for customs officials to follow

Which of the following is a potential negative consequence of high customs tariffs or duties?

  • Improved domestic job market
  • Stronger national security
  • Increased government revenue
  • Reduced consumer choice (correct)

What is the primary economic rationale for the imposition of customs tariffs or duties?

<p>To protect domestic industries from foreign competition (D)</p> Signup and view all the answers

Which of the following is a key function of a customs authority or agency?

<p>To set and enforce tariff rates on imported goods (C)</p> Signup and view all the answers

What is the primary purpose of a customs union, such as the European Union?

<p>To eliminate tariffs and trade barriers between member countries (D)</p> Signup and view all the answers

Which objective first led to the levying of customs duties for revenue purposes?

<p>Generating revenue (C)</p> Signup and view all the answers

Why did import prohibitions gradually decline from about 1750 to 1850?

<p>They led to a rise in smuggling activities (B)</p> Signup and view all the answers

During the World War and the subsequent reconstruction period, what form did tariffs take?

<p>Contingents (A)</p> Signup and view all the answers

What was the primary reason for the return of import prohibitions during the World War and the subsequent reconstruction period?

<p>To combat smuggling activities (D)</p> Signup and view all the answers

In what period did import prohibitions largely vanish before the World War?

<p>18th and 19th century (A)</p> Signup and view all the answers

What was the dominant reason for utilizing export duties in tropical and subtropical countries?

<p>To generate revenue (D)</p> Signup and view all the answers

What was the primary purpose of establishing different tariff rates based on the origin of goods and ships?

<p>To promote domestic agriculture and arts by protecting them from foreign competition (B)</p> Signup and view all the answers

According to the passage, what is the fundamental characteristic of a tariff?

<p>A schedule of rates for importing and exporting goods (A)</p> Signup and view all the answers

Which of the following statements best describes the purpose of a customs tariff?

<p>To impose taxes on goods entering or leaving a customs area (B)</p> Signup and view all the answers

Based on the information provided, which of the following rates would be the highest for importing foreign goods?

<p>Foreign goods in foreign ships (C)</p> Signup and view all the answers

What is the primary function of a tariff board or customs authority?

<p>To establish and enforce tariff rates on imported and exported goods (D)</p> Signup and view all the answers

According to the passage, what is the primary factor that determines the tariff rate for a particular good?

<p>The origin of the goods and the nationality of the ship carrying them (D)</p> Signup and view all the answers

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Study Notes

Customs

  • A list or schedule of articles or merchandise with the rate of duty to be paid to the Government for their importation or exportation
  • A duty levied according to such a schedule or collectively on one class of articles
  • The system of imposing duties or taxes on the importation of foreign merchandise
  • Originated from duties paid from time immemorial, now considered public taxes on goods crossing the border of a territory

History of Customs

  • Initially, duties were only for revenue purposes
  • With the growth of mercantilism and nationalism in the 16th and 17th centuries, duties were used to protect domestic industries, promote a favorable balance of trade, and punish foreign countries
  • Export duties were abolished, and tariffs came to consist mainly of import duties, except in tropical and subtropical countries

Objectives of Levying Customs Duties

  • To increase revenue
  • To protect the agriculture and arts of the islands
  • To expand foreign commerce

Rate of Customs Duties

  • 4 rates were established according to origin:
    • Spanish goods in Spanish ships (lowest rate)
    • Spanish goods in foreign ships
    • Foreign goods in Spanish ships
    • Foreign goods in foreign ships

Tariff

  • A table or catalog containing the names of several kinds of merchandise with the duties or customs to be paid
  • A schedule or rates of import or export duties
  • A tax levied on a commodity when it crosses the boundary of a customs area
  • Can be a cartel of commerce, a book of rates, or a table or catalogue

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