Which of the Following Statements Is True About Import Quotas

question 42

Multiple Choice

Which of the following statements is true about import quotas?

• A)Import quotas benefit domestic producers by limiting import competition.
• B)Import quotas always lower the prices for domestically produced goods.
• C)Higher tariff rates are usually applied to imports within the quota than those over the quota.
• D)Import quotas benefit consumers by decreasing the domestic price of an imported good.
• E)Import quotas help foreign producers gain a competitive advantage.

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Definitions:

Effective Annual Rate

The interest rate on a loan or investment, adjusted for the effect of compounding over a given period.

Compounded Annual

The process of calculating interest on both the initial principal and the accumulated interest from previous periods on a deposit or loan.

Nominal Rates

The stated interest rate on a loan or investment, not accounting for inflation or compounding effects.

Real Rates

Real rates refer to the interest rates adjusted for inflation, representing the true cost of borrowing or the real yield on an investment.