A Tariff ________ a Deadweight Loss and an Import Quota

question 80

Multiple Choice

A tariff ________ a deadweight loss and an import quota ________ a deadweight loss.

• A)creates;creates
• B)does not create;creates
• C)creates;does not create
• D)does not create;does not create
• E)sometimes creates;always creates

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Definitions:

Expansionary Gap

A situation in macroeconomics where a country's actual gross domestic product exceeds its potential GDP, leading to inflation.

Fiscal Policy

Refers to the use of government spending and tax policies to influence economic conditions, including demand, employment, and inflation.

Aggregate Demand Curve

A graphical representation showing the relationship between the total quantity of goods and services demanded across all sectors of an economy and the price level, all else being equal.

Recessionary Gap

The difference between the actual level of GDP and the potential level of GDP in an economy, indicating economic underperformance.