ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -1.1 Definition of tariff rate quota (TRQ) A TRQ is a quota that establishes a limit on the quantity of a product that may be imported at a lower (within access) rate of duty, but places no limit on the amount of product that may be imported at a higher (over access) rate of duty.

Detailed explanation-2: -Absolute quotas strictly limit the quantity of goods that may enter the commerce of the United States for a specific period. Tariff rate quotas permit a specified quantity of imported merchandise to be entered at a reduced rate of duty during the quota period.

Detailed explanation-3: -How are quotas and tariffs typically applied to restrict international trade? Tariffs are taxes on imported goods and services, and quotas limit the number of imported goods and services.

Detailed explanation-4: -Tariffs are used to restrict imports by increasing the price of goods and services purchased from another country, making them less attractive to domestic consumers.