ECONOMICS (CBSE/UGC NET)

ECONOMICS

BARRIERS TO TRADE

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

In 2011, the United States Department of Agriculture increased its annual sugar-import limit to 1.6 million tons for the year. This is an example of which trade barrier?

A	Tariff
B	Embargo
C	Quota
D	None of the above

Explanation:

Detailed explanation-1: -What are some examples of quotas? The United States does not currently have any absolute quotas, but it has many tariff quotas that increase tariffs on a good once its import quota is met. Some items under a tariff rate quota in the United States include tuna, olives, and ethyl alcohol.

Detailed explanation-2: -An import quota is a limit on the total quantity of imports that can be brought into a country in a given time period. It is a non-tariff barrier. A quota restricts supply leading to higher prices. For example China has a quota on Cambodian rice exports of 300, 000 tonnes per year.

Detailed explanation-3: -Answer and Explanation: If the United States places an import quota on imported sugar, then consumers will seek substitutes for sugar and products that use sugar.

Detailed explanation-4: -Specific tariffs. Ad valorem tariffs. Licenses. Import quotas. Voluntary export restraints. Local content requirements.

There is 1 question to complete.