Which of the Following Statements Is True

question 20

Multiple Choice

Which of the following statements is true?

• A) Both quotas and tariffs have direct and immediate effects on domestic prices regardless of the reactions of foreign sellers.
• B) Neither quotas nor tariffs have direct or indirect effects on domestic prices unless foreign sellers absorb some of the demand loss.
• C) Quotas have direct and immediate effects on domestic prices, but tariffs do not unless foreign sellers choose not to absorb their full value in the pretariff export price.
• D) Tariffs have direct and immediate effects on domestic prices, but quotas do not unless foreign sellers choose to absorb their full impact on demand.
• E) All of the above are true depending on the elasticities of demand.

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Definitions:

Potential Research Project

An idea or concept for a study that could be undertaken to investigate a particular area or phenomenon, not yet initiated.

Bias

A tendency, inclination, or prejudice toward or against something or someone, often in a way considered to be unfair or unbalanced.

Daily Life

Refers to the routines, activities, and experiences that constitute a person's normal day.

Immigrant Woman

A female who has moved from one country to another, either by choice or necessity, to seek a new life, work, or refuge.