Author Question: When the world price of the traded good is lower than the domestic no-trade equilibrium price, free ... (Read 76 times)

faduma · **on:** Jun 30, 2018

When the world price of the traded good is lower than the domestic no-trade equilibrium price, free trade causes domestic production to fall and domestic consumption to rise.
a. True
b. False
Indicate whether the statement is true or false

Question 2

A major difference between a tariff and a quota is that a tariff
a. will reduce the ability of foreigners to obtain the purchasing power to buy a nation's export goods, but a quota will not affect the demand of foreigners for the nation's exports.
b. typically generates tax revenue while a quota does not.
c. can easily be rescinded but a quota cannot.
d. will reduce imports but a quota generally will not.