Tariffs and quotas are one-size-fits-all measures that work as tools to internalize external effects.

Question

Quizplus · Accepted Answer

Tariffs and quotas are primarily used as trade policy tools to protect domestic industries and control the volume and value of goods coming into a country. They are not designed to internalize external effects, which refers to the process of accounting for the external costs or benefits of economic activities within the market prices.

Tariffs and Quotas Are One-Size-Fits-All Measures That Work as Tools