The Difference Between a Specific Tariff and an Ad Valorem

question 172

Multiple Choice

The difference between a specific tariff and an ad valorem tariff is that a specific tariff

• A)is a set amount of money per unit of a product, while an ad valorem tariff is a set percentage of product price
• B)is a set percentage of product price, while an ad valorem tariff is a set amount of money per unit of a product
• C)names a particular good to which the tariff applies, while an ad valorem tariff applies to large classes of products
• D)applies only to imports, while an ad valorem tariff applies only to exports
• E)sets a strict quota limit on the amount one individual can purchase, while an ad valorem tariff sets no such limit

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Definitions:

Active Investments

Investment strategies that involve frequent transactions and monitoring by investors or fund managers with the aim to outperform market indexes.

Forecasting Errors

Discrepancies between predicted values and actual values that occur when projecting future data points or trends.

Passive Investments

Investment strategies that involve minimal buying and selling actions, typically focused on long-term appreciation and mimicking market or sector indexes.

Regret Avoidance

Notion from behavioral finance that individuals who make decisions that turn out badly will have more regret when that decision was more unconventional.