In an effort to protect domestic industry, Congress is considering implementing a quota or a tariff. If both options reduce imports from 1 billion a year to 500 million a year, which option should Congress select and why?(1 point)
Responses
Congress should select the tariff because it will generate government revenue.
Congress should select the tariff because it will generate government revenue.
Congress should select the quota because it will generate government revenue.
Congress should select the quota because it will generate government revenue.
Congress should select the tariff because it will have less of a negative impact on domestic consumers.
Congress should select the tariff because it will have less of a negative impact on domestic consumers.
Congress should select the quota because it will have less of a negative impact on domestic consumers.
1 answer
Congress should select the quota because it will have less of a negative impact on domestic consumers. While both the quota and the tariff will reduce imports by the same amount, a tariff will increase the prices of imported goods for domestic consumers, potentially leading to higher costs of living. On the other hand, a quota will limit the quantity of imports without directly impacting prices, thus reducing the negative impact on domestic consumers.