An Import Quota Is Different from a Voluntary Export Restraint

question 176

Multiple Choice

An import quota is different from a voluntary export restraint because:

• A) the former is imposed by the exporting country and the latter by the home country.
• B) the former is imposed by the home country and the latter by the exporting country.
• C) the latter is specified by domestic importers.
• D) the former results in less gain for the country.

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Definitions:

Excise Tax

A tax levied on specific goods or services, such as alcohol, tobacco, and gasoline, usually to discourage their use or to generate revenue.

Negative Externality

A cost that affects a party who did not choose to incur it, often associated with the consumption or production of goods and services.

Price

The sum required, expected, or disbursed as a purchase price for an item.

Government-Provided Goods

Goods and services offered to the public by the government that might not be provided by the market or would be underprovided, such as public parks and national defense.