A tariff
A)is usually set by domestic producers of a good
B)can be either a fixed dollar amount or a percentage of a good's value
C)decreases domestic price for a good,holding all else constant
D)improves economic efficiency in the importing nation
E)improves economic efficiency in the exporting nation

Question

Quizplus · Accepted Answer

A tariff can be either a fixed dollar amount or a percentage of a good's value. Option A is incorrect as a tariff can be set by the government or the international trade organization of a nation. Option C is also incorrect as a tariff increases the domestic price for a good, not decreases it. Option D and E are also incorrect as a tariff can lead to economic inefficiencies in both the importing and exporting nation.

A Tariff