A Fixed Tariff Differs from an Ad Valorem Tariff Because

question 83

Multiple Choice

A fixed tariff differs from an ad valorem tariff because an ad valorem tariff:

• A)is a specific amount of money levied on each unit of a product sold by a country.
• B)is a specific amount of money levied on each unit of a product brought into a country.
• C)is based on the value of an item.
• D)prohibits trade in a particular product.
• E)limits the number of units of a particular product that can be imported into a country.

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Definitions:

Interest Rate

The amount charged by lenders as a percentage of the principal, or the amount earned on deposits over a specified period.

Equilibrium Value

The point at which the quantity of a good or service demanded equals the quantity supplied, resulting in market stability.

Opportunity Cost

Whatever must be given up to obtain some item.

Holding Currency

The practice of keeping money in the form of cash or liquid assets as opposed to investing or depositing it.