Which of the Following Is True of Import Tariffs and Quotas

question 140

Multiple Choice

Which of the following is true of import tariffs and quotas?

• A)They benefit domestic producers.
• B)Domestic consumers gain because they purchase the output of domestic firms.
• C)Specialization and comparative advantage are advanced by tariffs and quotas.
• D)They tend to expand the volume of world trade.
• E)Because they increase the output levels of domestic firms, they tend to lower domestic prices.

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Definitions:

World Trade Organization

An international organization that regulates international trade and ensures that trade flows as smoothly, predictably, and freely as possible.

International Trade Agreement

A legally binding contract between two or more nations that outlines the rules and regulations for trade between the countries, often aiming to reduce tariffs and barriers to trade.

Call Premium

The additional amount above the par value that a bond issuer must pay to redeem a bond before its maturity date.

Bondholders

Investors who own bonds issued by an entity, holding a creditor stake in the entity, entitled to receive fixed interest payments and the return of principal.