A tariff is a duty, or tax, on imports. There are two basic types of tariffs. Revenue tariffs are levied as a way to raise money. Protective tariffs are levied to protect a domestic industry from foreign competition. The goal is to make the foreign product more expensive then a similar item produced by a domestic producer. Then people will stop buying the foreign-made item and purchase its domestic counterpart. Restrictions on the numbers of certain specified goods that can enter the country from abroad are called quotas. Like protective tariffs, quotas limit the amount of foreign competition a protected industry will have to face.
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