ECONOMICS
BARRIERS TO TRADE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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encourage the flow of trade
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block or slow down trade
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make people obey the government
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None of the above
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Detailed explanation-1: -A trade barrier is something that slows down or stops your company from exporting goods or services to an overseas market.
Detailed explanation-2: -The effects of trade barriers can obstruct free trade, favor rich countries, limit choice of products, raise prices, lower net income, reduce employment, and lower economic output. The law is most commonly used as a trade barrier due to the significant control the government has over it.
Detailed explanation-3: -The most common barrier to trade is a tariff–a tax on imports. Tariffs raise the price of imported goods relative to domestic goods (good produced at home). Another common barrier to trade is a government subsidy to a particular domestic industry. Subsidies make those goods cheaper to produce than in foreign markets.
Detailed explanation-4: -What is the significance of trade barriers? Trade barriers are imposed by a nation to protect its domestic markets from the influence of foreign goods. They protect a nation’s home economy and also generate revenue. Trade barriers typically reduce the number of goods imported.