A Difference Between a Quota and a Tariff Is That

question 98

Multiple Choice

A difference between a quota and a tariff is that

• A) the government collects revenue from a tariff but does not collect revenue from a quota.
• B) a tariff generates a higher price than does a quota.
• C) a tariff generates a greater reduction in exports than does a quota.
• D) a quota increases the profits of domestic producers more than a tariff.

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Definitions:

Excess Reserves

The reserves that banks hold over and above the legally mandated minimum to meet withdrawal demands.

Federal Reserve Open Market Committee

The branch of the Federal Reserve System responsible for influencing money supply and credit conditions through the trading of government securities.

Board of Governors

The executive leadership of the Federal Reserve System, responsible for the formulation of monetary policies in the United States.

Federal Reserve

The central banking system of the United States, responsible for setting monetary policy.