ADM 3318 Chapter Notes - Chapter 6: Voluntary Export Restraints, Import Quota, Asteroid Family
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10 Dec 2016
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Tariffs: a tax levied by governments on imports or exports. Specific tariffs: levied as a fixed charge for each unit of good imported: ad valorem tariff: levied as a proportion of the value of the imported good. The government gains, because the tariff increases government revenues. Domestic producers gain, because the tariff affords them some protection against foreign competitors. Consumers lose because they must pay more for certain imports: economic conclusions, tariffs are unambiguously pro-producer and anti-consumer. Import tariffs reduce the overall efficiency of the world economy. This is because it encourages domestic producers to produce goods that, in theory, could be produced more efficiently elsewhere: export tariffs: much less common. The objectives of such tariffs are: (1) raise revenue for the government, and (2) reduce exports from a sector, often for political reasons. Subsidies: government financial assistance to a domestic producer. Import quotas: a direct restriction on the quantity of some good that can be imported into a country.
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