Quotas Are Similar to Tariffs in That They Do All

question 30

Multiple Choice

Quotas are similar to tariffs in that they do all of the following except

• A) increase domestic production
• B) decrease consumption
• C) directly raise price
• D) reduce imports

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Definitions:

Predatory Dumping

It involves temporarily reducing the price of goods in foreign markets to eliminate competition, with the intent to raise prices once competition has been reduced or eliminated.

Tariff

A tax imposed on imported goods and services, which can affect trade between countries by increasing the cost of imported goods.

Infant Industries

Newly established industries that are often protected by the government from international competition until they become competitive.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost per unit than the cost at which any other entity can produce it.