If the USA wants to reduce its imports (to promote domestic production) from China due to its trade deficit with China, compare which policy works more effectively, an import quota or an equivalent tariff? Reflect harder to compare the market adjustment by quota or tariff when domestic supply decreases due to a higher wage in a new labour contract. Use a graph to support your analysis.

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To compare the effectiveness of an import quota versus an equivalent tariff in reducing imports from China we need to consider their impact on market ... View the full answer