ECONOMICS
BARRIERS TO TRADE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Countries can embargo trade offers, so other countries will get upset/mad
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They can get really expensive, and if it’s a need for a country that doesn’t have enough money for it, they will have to gain extra money
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There isn’t really a negative affect
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They can cost countries a lot of money, and can possibly be in debt
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Detailed explanation-1: -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-2: -Trade barriers include tariffs (taxes) on imports (and occasionally exports) and non-tariff barriers to trade such as import quotas, subsidies to domestic industry, embargoes on trade with particular countries (usually for geopolitical reasons), and licenses to import goods into the economy.
Detailed explanation-3: -International trade is known to reduce real wages in certain sectors, leading to a loss of wage income for a segment of the population. However, cheaper imports can also reduce domestic consumer prices, and the magnitude of this impact may be larger than any potential effect occurring through wages.
Detailed explanation-4: -Trade barriers, such as taxes on food imports or subsidies for farmers in developed economies, lead to overproduction and dumping on world markets, thus lowering prices and hurting poor-country farmers.