Asked by Timothy DeKorver on May 03, 2024
Verified
In comparing a tariff and an import quota, we find that
A) the tariff and quota both generate the same amount of revenue for the U.S. Treasury.
B) the tariff generates revenue for the U.S. Treasury, but the quota does not.
C) the quota generates revenue for the U.S. Treasury, but the tariff does not.
D) neither the tariff nor the quota generates revenue for the U.S. Treasury.
Import Quota
An Import Quota is a government-imposed limit on the quantity or monetary value of a specific good that can be imported into a country within a specified time frame.
U.S. Treasury
The federal department responsible for managing government revenue, executing fiscal policy, and producing currency and government bonds.
- Assess the effects of tariffs on revenue generation and the welfare of both producers and consumers.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
B
Explanation :
Tariffs are taxes on imported goods collected by the government, generating revenue for the U.S. Treasury. In contrast, quotas limit the quantity of goods that can be imported without directly generating government revenue; any financial gains from quotas typically go to the foreign exporters or those who receive the import licenses, not the U.S. Treasury.
Learning Objectives
- Assess the effects of tariffs on revenue generation and the welfare of both producers and consumers.