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 quota 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 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 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.

Answer 1

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

Tariffs generate revenue for the government through the taxes imposed on imported goods, whereas quotas do not directly provide revenue, as they merely limit the quantity of imports without imposing a tax. Additionally, tariffs can potentially have a less restrictive impact on consumers compared to quotas, as they still allow imports at a reduced level. This typically means consumers can still access foreign goods at a potentially lower price compared to a quota system, which can lead to higher prices due to limited supply. Thus, a tariff strikes a balance between generating revenue and mitigating consumer impact.