Tariffs and quotas:
A) reduce the current account
B) improve the capital account
C) are intended to improve the current account but in fact if they cause trading partners to retaliate may . have an indeterminate affect of the current account
D) reduce the capital account

Question

Quizplus · Accepted Answer

Tariffs and quotas are primarily aimed at improving a country's current account by reducing imports and encouraging domestic production. However, if these measures lead to retaliation from trading partners, the overall effect on the current account can be uncertain, as retaliatory measures might reduce a country's exports.

Tariffs and Quotas