Answer:
B) They will be overstated for tariffs and understated for quotas.
Explanation:
Trade tariffs make foreign goods more expensive, resulting in unrealistically "cheaper" domestic products. This would overstate the purchasing power of the economy due to "cheaper" domestic products.
On the other hand, trade quotas reduce the number of imported goods but it tends to increase the price of domestic goods. Domestic suppliers will see a surge in their sales but at a high price. This will artificially lower the purchasing power of the economy due to "expensive" goods.
