The economic effects of a quota are identical to those of a tariff.

Question

Quizplus · Accepted Answer

While a quota and a tariff can both restrict trade, they have different economic effects. A quota limits the quantity of a certain good that can be imported, while a tariff imposes a tax on imported goods. Quotas can lead to higher domestic prices and reduced availability of the imported goods, while tariffs can lead to higher prices for consumers and reduced trade volumes. Therefore, the economic effects of a quota and a tariff are not identical.

The Economic Effects of a Quota Are Identical to Those