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Chapter 19: Problem 9

Imports would be lowered by a) tariffs only b) import quotas only c) both tariffs and import quotas d) neither tariffs nor import quotas

Short Answer

Expert verified
c) Both tariffs and import quotas

Step by step solution

01

Define Tariffs

Tariffs are taxes imposed on imported goods, increasing their prices. This makes the imported goods less attractive to domestic consumers compared to locally produced goods. As a result, the demand for imported goods decreases, reducing imports.
02

Define Import Quotas

Import quotas are restrictions set on the quantity of a specific good that can be imported within a certain period. Import quotas limit the supply of imported goods, thus reducing the quantity of goods that can be delivered to domestic consumers, and consequently lowering imports.
03

Analyze the Impact of Tariffs

When tariffs are imposed on imported goods, their prices increase, making them less attractive to domestic consumers. This shift in demand will lead to a reduction in the quantity of imported goods, thus lowering imports.
04

Analyze the Impact of Import Quotas

By limiting the quantity of a good that can be imported, import quotas directly reduce imports. Since fewer units of the good are allowed to enter the domestic market, imports will be lowered.
05

Analyze the Combined Impact of Tariffs and Import Quotas

If a country implements both tariffs and import quotas at the same time, it would lead to a reduction in imports through the combined effect of higher prices (due to tariffs) and limited supply (due to import quotas).
06

Analyze the Impact of Neither Tariffs nor Import Quotas

If no tariffs or import quotas are implemented, imports would not be affected in the context of this exercise. As such, there would be no change in imports in this scenario. #Conclusion# Based on the analysis, the correct answer is: c) both tariffs and import quotas

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Most popular questions from this chapter

Statement 1: Our trade deficit with China is larger than our trade deficit with Japan. Statement 2: Americans pay lower taxes on gasoline than do the citizens of most of the nations in Western Europe. a) Statement 1 is true, and statement 2 is false. b) Statement 2 is true, and statement 1 is false. c) Both statements are true. d) Both statements are false.

Which statement is the most accurate? a) The United States can be described as a purely free trading nation. b) The United States is one of the most protectionist nations in the world. c) The rich nations provide hundreds of billions of dollars in agricultural subsidies to the poorer nations. d) The United States provides smaller agricultural subsidies than does Japan and the European Union.

Which statement is the most accurate? a) Globalization, on balance, has been very bad for the U.S. economy. b) All the effects of globalization have been very good for the U.S. economy. c) The best way to reduce our trade deficit is for Congress to pass a law requiring that we buy only American products. d) Each of our recent presidents has basically supported the concept of free trade.

Our biggest annual trade deficit in our history was more than billion. a) \( 300\) d) \( 600\) b) \( 400\) e) \( 700\) c) \( 500\)

Which statement is the most accurate? a) Globalization has made some people winners and others losers. b) Globalization has been good for everyone involved. c) Globalization has been bad for everyone involved. d) Virtually all economists believeå that globalization has almost no downside.
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