Which of the Following Statements Is True About Import Quotas

question 20

Multiple Choice

Which of the following statements is true about import quotas?

• A) Import quotas benefit domestic producers by limiting import competition.
• B) If a domestic industry lacks the capacity to meet demand, an import quota can raise the prices for domestically produced good but not the imported good.
• C) Under an import quota, a lower tariff rate is 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) An import quota helps a foreign producer in gaining a competitive advantage in the markets of the country which imposes the quota.

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Definitions:

Negotiations

The process of discussing and arriving at a mutual agreement between parties with differing needs, desires, or opinions.

Principles

Fundamental truths or propositions that serve as the foundation for a system of belief, behavior, or reasoning.

Objective Credibility

The degree to which information or arguments are supported by factual evidence and can be verified independently.

Truthfulness

Truthfulness is the quality of being honest and transparent in one’s words and actions, ensuring accuracy and straightforwardness.