A Difference Between a Quota and a Tariff Is That

question 90

Multiple Choice

A difference between a quota and a tariff is that

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

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Definitions:

Earnings

The amount by which revenues exceed expenses.

Stockholders

Individuals or entities that own shares of stock in a corporation, thereby having a residual claim on the company's assets and earnings.

Solvency

This financial term refers to an entity's ability to meet its long-term financial obligations, indicating financial stability.

Interest Payments

Payments made to lenders as compensation for borrowing money, typically calculated as a percentage of the principal.