The Basic Difference in the Economic Effects of a Tariff

question 109

Multiple Choice

The basic difference in the economic effects of a tariff compared with a quota is that a

• A) quota reduces domestic consumption of the product, but a tariff does not.
• B) tariff allows imports to increase if demand increases, whereas a quota does not.
• C) tariff raises product prices, but a quota does not.
• D) quota raises product prices, but a tariff does not.

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Definitions:

Tea

A beverage made by steeping processed leaves, buds, or twigs of the tea plant, Camellia sinensis, in hot water, enjoyed worldwide for its flavor and health benefits.

Cameras

Devices used to capture images, either as still photographs or as moving images (videos), through the use of lenses and a recording medium.

Demand for Film

Refers specifically to the desire or willingness of consumers to purchase movies or cinema tickets at various price levels.

Price

The cash amount forecasted, required, or paid out for acquiring something.