Describe how tariff could reduce imports.

A tariff is a tax imposed on imports or exports. Tax is an expense and hence increase the price of the goods and services. As price increases, demand decreases. Consequently, suppliers are discouraged from importing goods. However, it's important to note that the demand for goods will increase or decrease depending on the elasticity of demand. Imports with inelastic demand will not decrease even though a tariff is imposed, for example demand for cigarettes. 

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Answered by Aminath H. Economics tutor

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