The Effect of a Tariff or a Quota Is to

question 31

Multiple Choice

The effect of a tariff or a quota is to

• A)raise the price of a commodity in the exporting country above the price in an importing country.
• B)raise the price of a commodity in an importing country above the price in the exporting country.
• C)lower the price of the commodity in all countries.
• D)raise the price of the commodity in all countries.

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Definitions:

Expected Return

This is the average amount of profit or loss an investor can expect on an investment, calculated based on historical data or subjective probabilities.

Risky Securities

Financial instruments that carry a higher risk of losing the principle due to volatile market conditions but potentially offer higher returns.

Weighted Average

This is an average in which each quantity to be averaged is assigned a weight, reflecting its importance.

Variances

Statistical measures that represent the degree of spread or dispersion of a set of values around their mean, commonly used to quantify risk in finance.