The Effect of an Import Quota Is

question 191

Multiple Choice

The effect of an import quota is

• A) to shift the supply curve up by the amount of the quota.
• B) to lead to a decrease in demand.
• C) to make the supply curve vertical at the amount of the quota.
• D) to make the supply curve horizontal at the amount of the quota.

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points, representing the average difference from the mean; widely used in finance as a measure of investment risk.

Arbitrage Opportunity

The chance to buy an asset at a low price in one market and simultaneously sell it at a higher price in another, securing a risk-free profit.

Long-short Equity Fund

A type of investment fund that takes both long and short positions in stocks, aiming to profit from increases in the prices of some stocks and decreases in the prices of others.

Risk-free Rate

The theoretical rate of return on an investment with zero risk, typically represented by U.S. Treasury securities.