A Difference Between a Quota and a Tariff Is That

question 129

Multiple Choice

A difference between a quota and a tariff is that

• A) a tariff generates a higher price than does a quota.
• B) a tariff generates a greater reduction in exports than does a quota.
• C) a quota increases profits of domestic producers more than does a tariff.
• D) the government collects revenues from a tariff but does not collect revenues from a quota.

---

Definitions:

Speculative Investment

An investment with a high degree of risk, where the investor anticipates significant returns in exchange for the risk of losing most or all of the invested amount.

GAAP Accounting

Generally Accepted Accounting Principles, a set of rules and standards for financial reporting and accounting practices in the United States.

Unrealized Gain

The hypothetical profit on an investment that has not yet been sold, and thus, not yet converted into actual cash.

Hedged Item

An asset, liability, or planned transaction exposed to price risks that are offset by using a hedging instrument.