Company XYZ produces cheese in Scotland and exports the cheese, which costs $100 per pound, to the United States. A 20% tax would require Company XYZ to pay the United States government $20 to export the cheese. This is a(n) .....

BARRIERS TO TRADE

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

Company XYZ produces cheese in Scotland and exports the cheese, which costs $100 per pound, to the United States. A 20% tax would require Company XYZ to pay the United States government $20 to export the cheese. This is a(n) ____

A	Tariff
B	Quota
C	Embargo
D	None of the above

Explanation:

Detailed explanation-1: -Common examples of protectionism, or tools that are used to implement a policy of protectionism include tariffs, quotas, and subsidies. All of these tools are meant to promote domestic companies by making foreign goods more expensive or scarce.

Detailed explanation-2: -A quota is a government-imposed trade restriction that limits the number or monetary value of goods that a country can import or export during a particular period.

Detailed explanation-3: -Trade barriers are often enacted to protect industries and workers within a country. This is referred to as protectionism. For example, tariffs, quotas and embargoes make foreign goods more expensive and less available.

Detailed explanation-4: -Import quotas are government-imposed limits on the quantity of a certain good that can be imported into a country. Generally speaking, such quotas are put in place to protect domestic industries and vulnerable producers.

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ECONOMICS (CBSE/UGC NET)

ECONOMICS

BARRIERS TO TRADE