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AP® Macroeconomics

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Tariffs vs. Quotas

APMACR-FG1K4E

In terms of US government revenue, a quota on Japanese goods is different from a protective tariff in that

A

the US government gets more revenue from the quota than it would the tariff.

B

the tariff generates a loss of revenue for the U.S. government.

C

quotas effectively increase government revenue across the board while protective tariffs reduce revenue across the board.

D

the U.S. probably sustains less net revenue from a quota than a tariff.

E

the revenue from each would be equal.