By placing tariffs on imported goods, governments can increase the cost of exporting relative to foreign direct investment and licensing. True or False

The correct answer is True.

Explanation:

There are economic and political reasons for the governments of all countries to intervene in international trade. Government intervention generally consists in restricting the importation of certain goods and services, at the same time, as adopting measures that promote exports; The ultimate goal is the protection of domestic producers and jobs from foreign competition.

Foreign trade policy can grant powerful incentives or disincentives to production, through its influence on prices and quantities of competing products imported into the country and through its effects on domestic prices received for exports. It is said that policies that increase prices of imports in the domestic market provide economic protection. The main instruments of trade policy are tariffs and fees on the side of imports, and various types of incentives when it comes to exports. In some cases a combination of quotas and tariffs (known as "tariff quotas") is used, according to which tariffs are increased when imports exceed a set amount.