Tariffs can make imported goods more expensive and may protect domestic industries.

### Why this is right A tariff is a levy on imported goods. By raising the cost of imports, it can generate government revenue and make domestic alternatives more competitive. ### The concept Economic conditions affect business costs, demand, and competition. Tariffs are one policy factor; other examples include taxation, monetary policy, technology, and economic indices. The effect of a policy depends on how buyers and firms respond. ### Terms - **Tariff**: A levy on imported goods, which can raise their domestic price. - **Domestic industry**: Producers operating within a country's economy. ### Remember A tariff applies to imports and can change their relative price.