Quotas That Limit the Quantity of Imports of a Foreign

question 21

Multiple Choice

Quotas that limit the quantity of imports of a foreign good provide an incentive for foreign suppliers to:
I.Provide higher quality goods.
II.Seek more open markets elsewhere.
III.Lower prices to be more competitive.
IV.Stop all trade with the country imposing the quotas.
Which of the above statements are true?

• A) I and II.
• B) I and III.
• C) II and IV.
• D) III only.

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Definitions:

Capitalist Society

A system of economy in which the ownership of resources and investments lies in the hands of private entities or businesses, and where market pricing, the manufacturing, and allocation of commodities are largely governed by the dynamics of competition within an open market.

Gross Sales

The total revenue generated from the sale of goods or services before any deductions are made for returns, allowances, or discounts.

Wal-Mart

A multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores, known for its large-scale operations and economic impact.

Exxon

An American multinational oil and gas corporation, one of the world's largest publicly traded energy providers.