The basic difference between a tariff and quota is that:
a. quota can be imposed both on imports and exports whereas a tariff can be imposed only on imports.
b. quota yields revenue to the government whereas tariff does not yield any revenue.
c. tariff reduces the import of the goods with greater certainty than quota as the amount of import restricted by quota depends on the price elasticity of demand for importable.
d. tariff is a quantitative restriction on imports whereas quota is an import duty.
e. a tariff raises the price of the product only in the domestic market whereas with a quota, both domestic and foreign producers receive a higher price.
e
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All of the following are devices that governments can use to achieve a more efficient allocation of resources in the presence of external benefits EXCEPT
A) vouchers. B) private subsidies. C) marketable permits. D) public provision.
Irving Fisher took the view that the institutional features of the economy which affect velocity change ________ over time so that velocity will be fairly ________ in the short run
A) rapidly; erratic B) rapidly; stable C) slowly; stable D) slowly; erratic
Euro-optimists are convinced that with OCA criteria as guiding principles:
A) Eurozone members will never again be caught in the trap of fiscal irresponsibility. B) the euro will strengthen against other world currencies to the extent that even occasional debt issues will not affect it. C) greater market integration will bring about labor and capital mobility and increased trade that will serve to strengthen the Eurozone. D) the ECB will be able to loosen its stranglehold and provide sufficient liquidity for the Eurozone economies to thrive.
In the late 1990s, Thailand, Malaysia, and Indonesia all experienced sharp declines in the value of their currencies; this resulted in economic instability and crisis. The collapse in the values of their currencies undermined their development by:
A. decreasing political instability. B. decreasing population growth. C. increasing corruption. D. reducing investment.