Trade Barriers Flashcards

Questions and Answers

What do quotas and embargoes have in common? (Select all that apply)

They both set limits on imported goods. (correct)

They both affect imports from certain countries.

They both frequently result in domestic shortages.

They both tend to raise prices.

Why do countries provide financial incentives?

Financial incentives act as trade barriers.

What is the purpose of quotas?

To keep prices on domestic goods low

To ban all imports from a country

To ensure specific goods are not available to consumers

To limit how much of a good can be imported (correct)

Which type of goods becomes more expensive as a result of tariffs?

Imported Signup and view all the answers

Which group directly benefits from subsidies?

Producers Signup and view all the answers

How do quotas help domestic producers?

Quotas facilitate the sale of more domestic goods. Signup and view all the answers

What types of incentives are duties and taxes imposed on cars that are imported from other countries?

Negative incentive and tariff Signup and view all the answers

Which best describes why countries establish limits on international trade? (Choose three answers)

To restrict foreign influence in a sector Signup and view all the answers

Which best describes the standards required of foreign producers?

Foreign producers must meet the same standards as domestic producers. Signup and view all the answers

On which country has the United States imposed an embargo since 1960?

Cuba Signup and view all the answers

Study Notes

Trade Barriers Overview

Quotas and embargoes impose limits on the volume of imported goods, generally raising prices and potentially causing domestic shortages.

Financial Incentives

Financial incentives serve as trade barriers, influencing trade dynamics by restricting imports and supporting domestic markets.

Quotas

The purpose of quotas is to limit the quantity of specific goods that can be imported, helping maintain price stability for domestic products.

Tariffs

Tariffs make imported goods more expensive, indirectly encouraging consumers to purchase domestic alternatives.

Subsidies

Producers benefit directly from subsidies, which enhance their competitiveness in the domestic and international markets.

Impact of Quotas

Quotas promote the sale of domestic goods by reducing competition from imported products, thereby supporting local industries.

Duties and Taxes

Duties and taxes imposed on imported vehicles act as negative incentives and are categorized as tariffs, impacting consumer prices.

Reasons for Trade Limits

Countries establish trade limits primarily to restrict foreign influence, control the importation of certain goods, and sometimes to impose punitive measures on other nations.

Standards for Foreign Producers

Foreign producers are required to meet the same regulatory standards as domestic producers to ensure fairness and consumer protection.

United States Embargo

The United States has maintained an embargo against Cuba since 1960, affecting trade relations and economic conditions in both nations.

Description

This quiz explores various aspects of trade barriers, including quotas and embargoes, as well as the role of financial incentives in international trade. It provides insights into how these factors affect imports and domestic markets. Test your knowledge to better understand these critical concepts in trade economics.