Most tariffs have ?
Correct answer: C. Both protective and revenue effects
- A. only revenue effects
- B. only protective effects
- C. Both protective and revenue effects
- D. neither protective or revenue effects
Explanation
A tariff protects domestic producers by raising the domestic price and also generates government revenue on imported units. Thus, most tariffs have both protective and revenue effects, although the size of each effect varies.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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