Question

What are the similarities and differences in the economic effects of tariffs and quotas? Which one...

What are the similarities and differences in the economic effects of tariffs and quotas? Which one is more effective in protecting an industry and why?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Similarities:

  • Decrease international trade and customers tend to pay higher price.
  • Domestic industries get protection and may grow exponentially.
  • Inflationary pressures are likely to rise.

Differences:

  • Tariffs do not affect trade profoundly but quota impacts are severe.
  • Quota leads to more foreign exchange saving when compared to tariffs.
  • Quota is relatively flexible and its results and outcomes can be predicted easily.
  • Unlike tariffs, quota does not generate revenue for government.

Quota is regarded as more effective in protecting an industry since it restricts the output and even low cost products can not enter the market. Tariffs can not be penetrated through the low cost products.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Tariffs and Quotas      Small Country      A. Effects of tariffs on         - Domestic Price...
Tariffs and Quotas      Small Country      A. Effects of tariffs on         - Domestic Price         - Domestic production         - Imports         - Consumer and producer surplus         - Production and consumption distortion         - Government revenue      B. Quotas         - Effect on export supply and domestic price         - Effects on consumer and producer surplus,           production and consumption distortion         - The quota rent         - Methods of allocating the quota rent      C. Large...
8. (8 pts.) Tariffs and quotas are both trade restrictions. Explain one way that tariffs and...
8. (8 pts.) Tariffs and quotas are both trade restrictions. Explain one way that tariffs and quotas are different. Also, explain one way the tariffs and quotas are similar (other than both being trade restrictions).
WTO had a tariffication process through which countries substituted their import quotas with tariffs. This is...
WTO had a tariffication process through which countries substituted their import quotas with tariffs. This is because economists usually think that quota is more inefficient for the global economy than an import tariff. Why is import quota more inefficient？ Using two real-world examples, explain some unintended(and undesirabel) consequence of quotas.
WTO had a tariffication process through which countries substituted their import quotas with tariffs. This is...
WTO had a tariffication process through which countries substituted their import quotas with tariffs. This is because economists usually think that quota is more inefficient for the global economy than an import tariff. Why is import quota more inefficient？ Using two real-world examples, explain some unintended(and undesirabel) consequence of quotas.
Import quotas and tariffs produce similar results. Which of the following is not one of those...
Import quotas and tariffs produce similar results. Which of the following is not one of those results? a. The domestic price of the good increases. b. Consumer surplus of domestic consumers increases. c. Producer surplus of domestic producers increases. d. A deadweight loss is experienced by the domestic country.
What are import quotas? Why do some governments use them instead of just using tariffs to...
What are import quotas? Why do some governments use them instead of just using tariffs to restrict imports by the same amounts? Is it because quotas bring a bigger national gain than tariffs?
Describe the distinct similarities / differences between ETFs and Mutual Funds. Which is more expensive to...
Describe the distinct similarities / differences between ETFs and Mutual Funds. Which is more expensive to invest with and why?
List the similarities and differences between Preferred Equity and Mezzanine Debt. Take one of those similarities/differences...
List the similarities and differences between Preferred Equity and Mezzanine Debt. Take one of those similarities/differences and explain it in detail.
What were the main economic contributions of The Physiocrats and Adam Smith? What are the similarities...
What were the main economic contributions of The Physiocrats and Adam Smith? What are the similarities and differences of those economic contributions?
Discuss the major similarities and differences between U.S. GAAP and IFRS. Which of the differences do...
Discuss the major similarities and differences between U.S. GAAP and IFRS. Which of the differences do you find most interesting? If there is a convergence between U.S. GAAP and IFRS, would you choose the U.S. GAAP or IFRS method? Why?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT