ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The most direct barrier to trade is an embargo– a blockade or political agreement that limits a foreign country’s ability to export or import. Embargoes still exist, but they are difficult to enforce and are not common except in situations of war. The most common barrier to trade is a tariff–a tax on imports.

Detailed explanation-2: -Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.

Detailed explanation-3: -Trade barriers are nothing but the type of measures which are introduced by government or public authorities to make imported goods or services less competitive than locally produced goods and services. Not everything that prevents or restricts trade can be charecterished as a trade barrier.

Detailed explanation-4: -Barriers include administrative procedures, quantitative restrictions (such as quotas), price controls, licensing requirements, product labelling requirements and privacy requirements. Trade barriers take two forms: Tariff barriers-Tariff barriers are taxes imposed by a government on imports or exports of goods.

Detailed explanation-5: -Tariffs are a tax on imports. Quotas are a limit on the number of a certain good that can be imported from a certain country. Embargoes occur when one country bans trade with another country. More items