Question

Evaluate the following statement. True or False: A quota’s revenue effect generally accrues to the domestic government, whereas the tariff’s revenue accrues to domestic importers or foreign exporters. True False

Answer 1

False

Step-by-step explanation:

Quotas are quantitative limitations to imports, making a single good more expensive to consumers and affecting suppliers in terms of higher revenue, without direct effect to the government. Unlike quotas, import tariffs revenue is collected by a government body in the form of tax imposed on domestic importers.