ECONOMICS
ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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lowering the prices of goods for domestic consumers
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protecting domestic markets from foreign competition
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improving the standard of living of domestic populations
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reducing the costs of production for domestic businesses
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Detailed explanation-1: -Tariffs provide a country with extra revenue and they offer protection to domestic producers by causing imported items to become more expensive. Quotas are more effective in restricting trade than tariffs, especially if domestic demand for something is not price-sensitive.
Detailed explanation-2: -Tariffs make imported goods more expensive, while quotas restrict the quantity of imported goods that are available. The purpose of a tariff is to protect domestic industries from foreign competition. The purpose of a quota is to protect domestic industries from foreign competition.
Detailed explanation-3: -Import quotas offer another means of protectionism. These quotas set an absolute limit on the amount of certain goods that can be imported into a country and tend to be more effective than protective tariffs, which do not always dissuade consumers who are willing to pay a higher price for an imported good.
Detailed explanation-4: -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-5: -Trade barriers such as tariffs raise prices and reduce available quantities of goods and services for U.S. businesses and consumers, which results in lower income, reduced employment, and lower economic output.