International Trade Barriers Quiz
What is a tariff?
- A tariff is a tax imposed on imported goods by the importing country's government. Tariffs raise the cost of imported goods, which makes them less competitive than locally produced goods.
What is an import quota?
- An import quota is a limit on the quantity of a particular good that can be imported into a country. Import quotas are often used to protect domestic industries that produce similar goods.
What is an embargo?
- An embargo is a complete ban on the export of a particular good or goods to a specific country. Embargoes are often imposed for political or security reasons.
What is a subsidy?
- A subsidy is a payment made by a government to domestic producers to encourage production and make locally produced goods more competitive. Subsidies can be harmful to international trade as they create an uneven playing field.
What is a voluntary export restraint (VER)?
- A voluntary export restraint (VER) is a self-imposed limit on the quantity a country will export to another country, in terms of goods. VERs are often used to avoid the imposition of more severe trade barriers.
What is a trade war?
- A trade war is a situation where countries impose increasingly severe trade barriers on each other in an attempt to protect domestic industries and gain an advantage in international trade.
What is a non-tariff barrier?
- Non-tariff barriers are any barriers to trade that are not taxes or tariffs. Examples of non-tariff barriers include import quotas, licensing requirements, and technical standards.
What is protectionism?
- Protectionism is the belief that domestic industries should be protected from foreign competition through the use of trade barriers such as tariffs, quotas, and subsidies.
What is the World Trade Organization (WTO)?
- The World Trade Organization (WTO) is an intergovernmental organization that promotes free trade among member countries by reducing trade barriers and resolving trade disputes.
What is the purpose of free trade agreements (FTAs)?
- Free trade agreements (FTAs) are agreements between two or more countries to reduce trade barriers and promote free trade between member countries.
