Question

trade policies such as tariffs and quotas impact market outcomes by______.
○ encouraging international collaboration.
○ limiting the supply of goods.
○ reducing government intervention.
○ increasing the money supply.

Explanation:

• Tariffs (taxes on imports) and quotas (limits on import quantity) make it harder or more expensive for foreign goods to enter a market. This reduces the amount of goods available from international sources, thus limiting the overall supply of goods in the domestic market.
• "Encouraging international collaboration" is incorrect as tariffs/quotas are trade restrictions, not collaboration tools.
• "Reducing government intervention" is wrong because tariffs/quotas are forms of government intervention in trade.
• "Increasing the money supply" is unrelated, as trade policies like these don't directly affect the money supply (which is managed by monetary policy tools like central bank actions).

Answer:

B. limiting the supply of goods.