ECONOMICS
BARRIERS TO TRADE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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This is financial assistance from the government to encourage the production of or the purchase of a good.
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This is the practice of goods being traded between countries without any (or with reduced) tariffs that might slow down trade.
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This is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time.
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This is a tax on imported goods and is usually designed to protect domestic production of similar goods.
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Detailed explanation-1: -A subsidy is an incentive given by the government to individuals or businesses in the form of cash, grants, or tax breaks that improve the supply of certain goods and services. With subsidies, consumers are able to access cheaper products and commodities.
Detailed explanation-2: -Definition: Subsidy is a transfer of money from the government to an entity. It leads to a fall in the price of the subsidised product. Description: The objective of subsidy is to bolster the welfare of the society.
Detailed explanation-3: -Subsidies are a type of benefit that is offered by the government to the people, it results in reduction in the value of the subsidised product. It can be offered to individuals or public and private institutions.
Detailed explanation-4: -When the government gives a subsidy on the production of a good, marginal and average costs of production tend to fall. Accordingly, producers will supply more at the same price or supply the same quantity at the lower price.