One Big Difference Between Tariffs and Quotas Is That Tariffs

question 110

Multiple Choice

One big difference between tariffs and quotas is that tariffs:

• A) raise the price of a good while quotas lower it.
• B) generate tax revenues while quotas do not.
• C) stimulate international trade while quotas inhibit it.
• D) hurt domestic producers while quotas help them.
• E) give the same outcome as free trade while quotas do not.

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Definitions:

Physical Inventory

The process of counting by hand the actual inventory available in a business at a specific time, typically done periodically.

Cost of Inventory

The total expense to purchase and manage inventory stocks, including purchase costs, shipping, handling, and storage.

Perpetual Inventory System

An accounting system that continuously updates inventory records and cost of goods sold after each purchase or sale.

Closing Entry

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent ones, thereby preparing the books for the next period.