BACHELOR OF BUSINESS ADMINISTRATION

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BUSINESS ADMINISTRATION

BUSINESS ECONOMICS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
“Suppose US Government imposes a quota on the import of foreign cars.”-Questions such as “ What will happen to the price, production and sales of cars? What will be the impact of this policy have on American consumers? On Workers in the automobile industry?” Belong to
A
1. Normative Analysis
B
2. Negative Analysis
C
3. Normal Analysis
D
4. Positive Analysis
Explanation: 

Detailed explanation-1: -Quota Effects The import quota reduces the supply of imports. This reduces the overall natural supply of goods in the domestic country and causes prices to rise above what many other countries may pay for a good where there are no artificially imposed limits on goods.

Detailed explanation-2: -Tariffs are taxes on imports; quotas are quantity limits on how many imports can enter the country. Both tariffs and quotas increase the equilibrium price and decrease the equilibrium quantity in the domestic market, compared to free trade.

Detailed explanation-3: -A tariff makes an import more expensive. A quota reduces the amount of a product that can get in the country.

Detailed explanation-4: -Generally speaking, such quotas are put in place to protect domestic industries and vulnerable producers. Quotas prevent a country’s domestic market from becoming flooded with foreign goods, which are often cheaper due to lower production costs overseas.

There is 1 question to complete.
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