The difference between an import quota and a tariff that results in the same domestic price is
a. none; they are the same
b. the quantity demanded is higher under the tariff
c. the world price is higher under the quota
d. the tariff revenue goes to the domestic government; quota benefits may go to foreigners
e. none because both quotas and tariffs are illegal
D
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Everything else held constant, an increase in net taxes ________ aggregate ________
A) increases; demand B) decreases; demand C) decreases; supply D) increases; supply
A decrease in the economy’s capacity utilization rate
a. tends to decrease the unemployment rate. b. tends to increase the unemployment rate. c. has no impact on the unemployment rate. d. tends to have an unpredictable effect on the unemployment rate.
Governments are most likely to adopt trade restrictions because
a) of nationalistic motives and prejudice against other countries b) protectionist policies benefit society as a whole c) tariffs are the primary source of government revenue d) those whom trade hurts are more cohesive and vocal than those whom trade benefits e) trade weakens the government’s ability to conduct stabilization policy
Individuals in a market economy can be both buyers and sellers.
Answer the following statement true (T) or false (F)