- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 6. International Trade
- Subject 2. International Trade Restrictions and Agreements
CFA Practice Question
The gains and losses generated by tariffs and quotas are such that ______
A. the gains of domestic producers exceed the losses of domestic consumers for tariffs but not for quotas.
B. the gains of domestic producers exceed the losses of domestic consumers for quotas but not for tariffs.
C. Neither of these answers is correct.
Explanation: The gains of domestic producers are smaller than the losses of domestic consumers for both tariffs and quotas. These policies generate a net deadweight loss.
User Contributed Comments 1
User | Comment |
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iceluke | dont mix it up with plain international trade |