10. Local content
The reduction in domestic consumption due to imposition of quota
results in
Answers
Answered by
0
Answer:
Loss of social welfare
Explanation:
correct answer
Answered by
0
Answer:
The correct answer is higher prices for consumers.
Explanation:
- A country's ability to import a certain number of items is restricted by an import quota. For instance, the US might set a 2 million annual import cap on Japanese cars.
- Quotas will aid domestic suppliers by lowering imports. However, they will result in increased consumer costs and a reduction in economic wellbeing, and they may trigger retaliation if other nations impose tariffs on our goods.
- For international businesses, quotas will result in decreased sales, but they may also drive up prices and increase the profitability of sales.
- Because quotas don't generate the same amount of tax income as tariffs do, economic wellbeing tends to decline more sharply under them.
- Through quotas, a nation can predict the volume of imports that will enter. Because demand elasticity and consumer and supplier responses to the tariff depend on it, tariffs are more ambiguous. If it is challenging to count the number of goods entering the country, quotas could be more difficult to implement.
- Quotas may even be more unjust. If they receive the quota allowance, some export businesses would prosper, while others might suffer. How to allocate the quotas turns into a political issue. The uncertainty of not knowing how many quotes to get can also be unsettling for businesses.
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