Which policy for restricting trade would be most attractive to a country that is imposing a trade restriction in an effort to raise as much government revenue as possible to cover government expenses?
A) a quota that reduces imports by 100,000 units for a product with $100 price tag
B) a quota that reduces imports by 50,000 units for a product with a $150 price tag
C) a 10% ad valorem tariff on a product with a $100 price tag that reduces imports from 300,000 to 200,000 units
D) a $8 specific tariff on a product with a $100 price tag that reduces imports from 350,000 to 220,000 units
Correct Answer:
Verified
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