Which of the Following Is the Best Example of a Tariff

question 31

Multiple Choice

Which of the following is the best example of a tariff?

• A)a limit imposed on the number of sports utility vehicles that the United States can import from Japan
• B)a subsidy granted by the U.S.government to domestic sports utility vehicle manufacturers so they can compete more effectively with foreign sports utility vehicle manufacturers
• C)a tax placed on all sports utility vehicles sold in the domestic market
• D)a $5,000 per-car fee imposed on all sports utility vehicles imported into the United States

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Definitions:

Output

The quantity of goods or services produced in a given period by a firm, industry, or country.

Multiplier Size

A measure of the impact of fiscal and monetary policies on the national income, showing how initial spending leads to increased total spending.

Fiscal Policy

Government policies regarding taxation and spending that are used to influence economic conditions, including stimulating or restraining economic growth.

Potential GDP

The highest level of Gross Domestic Product (GDP) an economy can sustain over a long period without increasing inflation, reflecting its full employment output.