Asked by Kassy Lazcano on May 28, 2024
Verified
Which of the following statements is false?
A) If the United States imposes a tariff on Japanese car imports, the price of cars in the United States is likely to increase.
B) If the United States imposes a quota on Japanese car imports, the price of cars in the United States is likely to increase.
C) If Japan imposes a subsidy on car exports to the United States, the price of cars in the United States is likely to increase.
D) If Japan imposes a "voluntary export restraint" on car exports to the United States, the price of cars in the United States is likely to increase.
Voluntary Export Restraint
A self-imposed limitation by exporting countries on the volume of their exports of a particular good.
Subsidy
A financial contribution granted by a government or another entity to support an industry, business, or individual, usually intended to keep prices low, support an essential service, or encourage activities beneficial to the public interest.
Tariff
A tax imposed on imported goods to either raise state revenue or protect domestic industries from foreign competition.
- Familiarize oneself with the operational aspects and implications of tariffs and quotas on global commerce.
Verified Answer
VA
Vanessa AguirreMay 31, 2024
Final Answer :
C
Explanation :
A subsidy on car exports to the United States would likely decrease the price of those cars in the U.S. market by making them cheaper for American consumers, contrary to the increase suggested in option C.
Learning Objectives
- Familiarize oneself with the operational aspects and implications of tariffs and quotas on global commerce.