ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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.

Detailed explanation-2: -Answer: Tax on imports is known as a trade barrier because it increases the price of imported commodities.

Detailed explanation-3: -A tariff or duty (the words are used interchangeably) is a tax levied by governments on the value including freight and insurance of imported products. Different tariffs applied on different products by different countries.

Detailed explanation-4: -Protective Tariff Examples For example, if a Japan-made wheelbarrow costs $50 in the US, and a locally produced wheelbarrow is also priced the same, protective tariffs are implemented on the imported Japanese wheelbarrows to force a price increase.

Detailed explanation-5: -Common examples of protectionism, or tools that are used to implement a policy of protectionism include tariffs, quotas, and subsidies. All of these tools are meant to promote domestic companies by making foreign goods more expensive or scarce.