ECONOMICS (CBSE/UGC NET)

ECONOMICS

BARRIERS TO TRADE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Argentina increased taxes to 9% on the import of milk powder after record levels of imports and fears Argentina farmers would suffer falling incomes. This is an example of which trade barrier?

A	Tariff
B	Embargo
C	Quota
D	None of the above

Explanation:

Detailed explanation-1: -Tariffs are taxes charged on the import of goods from foreign countries. While historically tariffs were used as a source of revenue for governments, they are now used mainly to protect domestic industries from foreign competition.

Detailed explanation-2: -Which of the following would be expected if the tariff on foreign-produced automobiles were increased? The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise.

Detailed explanation-3: -The most common is an ad valorem tariff, which means that the customs duty is calculated as a percentage of the value of the product.

Detailed explanation-4: -An example of a tariff could be a tariff on steel. This means that any steel imported from another country would incur a tariff-for example, 5% of the value of the imported goods-paid by the individual or business importing the goods.

There is 1 question to complete.