During periods of growing demand, a tariff more effectively restricts the volume of imports than an equivalent import quota.

Question

Quizplus · Accepted Answer

A tariff increases the price of imported goods, which might reduce demand but does not directly limit the quantity of imports. An import quota specifically limits the quantity of goods that can be imported, directly restricting the volume of imports regardless of demand changes.

During Periods of Growing Demand, a Tariff More Effectively Restricts