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:

Hydrofluoric Acid

A highly corrosive acid made of hydrogen and fluorine that is used in various industrial processes.

Sodium Hydroxide

A highly caustic metallic base and alkali salt, used in many industrial processes, often known as lye or caustic soda.

Sodium Hydrogen Carbonate

A chemical compound also known as baking soda, with formula NaHCO3, often used in cooking, cleaning, and neutralizing acids.

Sodium Carbonate

A white, water-soluble salt used widely in manufacturing glass, soaps, and detergents, and as a water softener.