Which of the following is false?
A. Tariffs on imports generate revenue for the government.
B. Tariffs on imports generate government revenue as long as the domestic price is larger than the world price plus the tariff.
C. Tariffs on imports do not generate government revenue if the domestic price is larger than the world price plus the tariff.
D. An import quota does not generate government revenue.
Answer: C
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A temporary decrease in government purchases in the classical model would
A) shift the production function to the left. B) shift the marginal product of labor curve to the right. C) shift the labor demand curve to the left. D) shift the labor supply curve to the left.
Can a firm's average variable costs be falling if they are less than the firm's marginal costs? Explain
A cost curve drawn with years on the horizontal axis and costs per unit on the vertical axis would be a(n)
a. analytical cost curve. b. long-run cost curve. c. historical cost curve. d. theoretical cost curve.
An economy in long-run equilibrium experiences an increase in aggregate demand. According to the classical model,
A. the price level will increase, but real GDP will not change. B. the price level and real GDP will increase at the same time. C. the price level will increase, but real GDP will decrease. D. the price level will rise first, then real GDP will increase.