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)

Question

Responses

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 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 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.

Congress should select the quota because it will generate government revenue.

Answer 1

The best option for Congress, in this case, would be:

Congress should select the tariff because it will generate government revenue.

This option is generally more favorable because tariffs not only limit imports but also create a source of revenue for the government. Quotas, on the other hand, do not generate revenue; they only restrict supply. Tariffs tend to be less disruptive to consumers because they allow for some level of importation while also providing a price incentive for domestic production. Additionally, tariffs maintain a competitive market while still supporting domestic industries.