A Country Raises the Tariff on Imported Cheese in Order

question 29

Multiple Choice

A country raises the tariff on imported cheese in order to increase its price above the price of domestically produced cheese.This is an example of _____.

• A)an exchange control
• B)a quota
• C)a protective tariff
• D)dumping

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Definitions:

Positive Externalities

Benefits experienced by third parties who are not directly involved in the production or consumption of a good or service.

Moral Hazard Problem

A situation where one party engages in risky behavior knowing that it is protected against the consequences by another party.

Government's Role

Refers to the duties and functions that a government carries out to ensure the stability and growth of its nation, including legislation, public service provision, and economic management.

Private Sector

The part of the economy that is owned and operated by individuals and companies for profit, as opposed to the state.