Which of the following trade policies raises prices for domestic consumers?

Question

Quizplus · Accepted Answer

All of the listed trade policies raise prices for domestic consumers. Import quotas limit the amount of foreign goods that can be imported, creating a scarcity that allows domestic producers to charge higher prices. Tariffs are taxes levied on imported goods, increasing their price and making them less competitive with domestic products. Voluntary export restraints are agreements between countries whereby the exporting country voluntarily limits the amount of goods it will sell to another country, decreasing supply and raising prices for domestic consumers.

Which of the Following Trade Policies Raises Prices for Domestic