ECONOMICS
BARRIERS TO TRADE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Tariff
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Quota
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Embargo
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None of the above
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Detailed explanation-1: -A tariff is a tax levied on an imported good with the intent to limit the volume of foreign imports, protect domestic employment, reduce competition among domestic industries, and increase government revenue.
Detailed explanation-2: -Answer: Tax on imports is known as a trade barrier because it increases the price of imported commodities.
Detailed explanation-3: -Definition: Customs Duty is a tax imposed on imports and exports of goods.
Detailed explanation-4: -Tariffs increase the price of goods and services in domestic markets by applying a tax on imported goods that is paid by the domestic importer. To cover the increased costs, the domestic importer then charges higher prices for the goods and services.