Which of the Following Is an Explanation for the Existence

question 127

Multiple Choice

Which of the following is an explanation for the existence of trade restrictions?

• A) Tariffs generate revenue for the government.
• B) Rent seeking
• C) Inefficient quotas
• D) Both answers A and B are key explanations.

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Definitions:

Quotas

Limits set on the quantity of a product that can be imported or exported during a given timeframe, used as a trade policy tool.

Specified Time Periods

Designated or clearly defined intervals of time within which certain actions are performed or conditions are to be met.

Exchange Controls

Regulatory measures imposed by a government on the buying/selling of foreign currencies or on the movement of currencies out of a country.

Exchange Control

Restriction on importation of certain products or against certain companies to reduce trade and expenditures of foreign currency.