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If a Tariff and an Import Quota Lead to Equivalent

Question 99

Multiple Choice

If a tariff and an import quota lead to equivalent increases in the domestic price of steel, then


A) the quota results in efficiency reductions but the tariff does not.
B) the tariff results in efficiency reductions but the quota does not.
C) they have different impacts on how much is produced and consumed.
D) they have different impacts on how income is distributed.

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