A Difference Between a Quota and a Tariff Is That

question 80

Multiple Choice

A difference between a quota and a tariff is that

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

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Definitions:

Purchases Discount

An accounting reduction in the price paid for goods or services if payment is made within a specified period.

Unearned Revenue

A liability account that records amount owed for goods or services in advance of delivery. The Cash account would record the receipt of cash.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.

Service Income

Income earned from the provision of services to clients or customers.