The Main Difference Between a Tariff and an "Equivalent" Voluntary

question 114

Multiple Choice

The main difference between a tariff and an "equivalent" voluntary export restriction (VER) is that

• A)a tariff keeps the price in the importing country higher than it would otherwise be; a VER does not.
• B)a tariff allows the importing country to protect wages and other factor incomes in the affected industry,while a VER does not.
• C)a tariff allows the extra market value of the good to accrue to the supplier,but a VER allows the extra market value to be appropriated by the government of the importing country.
• D)a tariff restricts free trade between two countries and a VER does not.
• E)a tariff allows the government of the importing country to appropriate the extra market value of the imported good,but with a VER the extra market value accrues to the good's foreign producers.

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Definitions:

Implantation

The process by which a fertilized egg attaches to the lining of the uterus to begin pregnancy.

Uterus

A female reproductive organ in which a fertilized egg implants and develops into a fetus.

Organogenesis

Organ formation that takes place during the first two months of prenatal development.

Organ Formation

The process during embryonic development in which cells differentiate and form the distinct organs and structures of the body, a phase also known as organogenesis.