An export subsidy differs from a tariff in each of the following ways EXCEPT
A) a tariff generates revenue.
B) a tariff is applied to imports.
C) a tariff results in an efficiency loss.
D) a tariff is a tax.
E) a tariff discourages imports.

Question

Quizplus · Accepted Answer

Both a tariff and an export subsidy result in an efficiency loss, making this the exception to how they differ. Tariffs and export subsidies distort market equilibrium, leading to inefficiencies in the allocation of resources.

An Export Subsidy Differs from a Tariff in Each of the Following