Trade barriers Quiz

Explanation
A protectionist trade restriction that sets a physical limit on the quantity of a good is called a quota. Quotas are used by governments to restrict the amount of a specific product that can be imported or exported. They are typically implemented to protect domestic industries from foreign competition or to manage the supply and demand of certain goods in the market. By imposing a quota, the government can control the quantity of the product entering or leaving the country, thereby influencing its availability and price.

Explanation
Trade refers to the voluntary exchange of goods and services between two or more parties. It involves the buying and selling of products or services in return for something of value, such as money or other goods. Trade is a fundamental concept in economics and plays a crucial role in the functioning of markets and the overall economy.

Explanation
A trade barrier is a restriction that is implemented to regulate international commerce. It can take various forms such as tariffs, quotas, or embargoes, which are designed to limit imports or exports of goods and services. These barriers are usually imposed by governments to protect domestic industries, promote economic growth, or address trade imbalances. By creating obstacles to trade, trade barriers can impact the flow of goods and services between countries, affecting the competitiveness of businesses and influencing global trade patterns.

Explanation
A tax imposed on imported goods, known as a tariff, is designed to protect domestic production of similar goods. It increases the cost of imported goods, making them less competitive compared to domestically produced goods. This helps to support and promote local industries by discouraging imports and encouraging consumers to purchase domestic products. Tariffs are a common tool used by governments to protect domestic industries and maintain a favorable trade balance.

Explanation
The correct answer is embargo. An embargo is a type of trade barrier where a country prohibits or restricts the import or export of certain goods or services to or from another country. In this case, the Middle Eastern countries stopped exporting oil to America as a form of protest against the US support of Israel. This action aimed to put economic pressure on the US by limiting its access to a vital resource.

Explanation
A tariff is a tax that is imposed on imported goods. This tax is typically levied by the government of the importing country in order to protect domestic industries and to generate revenue. Tariffs increase the price of imported goods, making them less competitive compared to domestically produced goods. This encourages consumers to purchase domestic products and supports local industries. Therefore, the correct answer is "Tax".

Explanation
Tariffs are used to make imported goods more expensive. A tariff is a tax imposed by a government on imported goods, which increases the price of these goods and makes them less competitive in the domestic market. This measure aims to protect domestic industries by making foreign products less attractive to consumers and encouraging them to purchase domestically produced goods instead. Tariffs can also be used as a tool to reduce trade deficits and protect national security by controlling the flow of certain goods into the country.

Explanation
An embargo is not meant to raise the amount of trade between two countries. Instead, it is a trade restriction imposed by one country on another, typically for political or economic reasons. The purpose of an embargo is to limit or prohibit trade in order to exert pressure or punishment on the targeted country. Therefore, the given statement is false.

Explanation
A country might place a limit or quota on another country to weaken their economy. This means that the country would restrict the amount of goods or services that can be imported from the other country. By doing so, the country can protect its own domestic industries and reduce competition from the other country. This can lead to a decrease in the other country's exports and ultimately weaken their economy.

Explanation
A quota is a restriction on the quantity of a particular good that can be imported into a country. In this scenario, the US president is increasing the allowed amount of imported peanuts by 100 million pounds per year, which indicates a quota being raised. A tariff refers to a tax imposed on imported goods, while an embargo is a complete ban on trade with a particular country. Therefore, the correct answer is quota.