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The Main Difference Between a Tariff and an "Equivalent" Voluntary

Question 112

Multiple Choice

The main difference between a tariff and an "equivalent" voluntary export restriction (VER) is that

A) a tariff restricts free trade between two countries and a VER does not.
B) a tariff allows the extra market value of the good to accrue to the supplier, but a VER allows the extra market value to be appropriated by the government of the importing country.
C) a tariff keeps the price in the importing country higher than it would otherwise be; a VER does not.
D) a tariff allows the importing country to protect wages and other factor incomes in the affected industry, while a VER does not.
E) a tariff allows the government of the importing country to appropriate the extra market value of the imported good, but with a VER the extra market value accrues to the good's producers.

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