One way tariffs differ from quotas is that
A) tariffs produce revenues for the importing country's government.
B) quotas produce revenues for the exporting country's government.
C) tariffs produce no revenues but set limits on the imported items.
D) tariffs are applied only on raw materials.

Question

Quizplus · Accepted Answer

Tariffs impose taxes on imported goods, generating revenue for the government of the importing country. Quotas, on the other hand, set limits on the quantity of imported goods, but do not generate revenue. Therefore, option A is the correct answer. Option B is not correct because quotas do not produce revenue for the exporting country's government. Option C is inaccurate because tariffs do produce revenue. Finally, option D is incorrect because tariffs can be applied to any import, not just raw materials.

One Way Tariffs Differ from Quotas Is That