Question

All but which ONE of the following is used as a barrier to trade?

a) Quotas

b) Tariffs

c) Interest Rates

d) Regulations

Discussion question: In addition to import-competing industrues seeking trade restrictions, what other arguments are used to restrict trade?

Please answer in a minimum of 150 words

Answer 1

The answer to the question is b- Tariffs

Trade barriers are government-induced restrictions on international trade.Most trade barriers operate on the same principle: imposing some kind of cost (money, time, bureaucracy, quota) on trade that increases traded products ' price or accessibility. If two or more countries use trade barriers against each other constantly, the result will be a trade war. Barriers take the form of tariffs and non-tariff barriers to trade (which impose a economic strain on imports).

Economics science — and common sense — obviously shows that all economies benefit from trade. Since nations have distinct absolute and comparative advantages in the production of products and services, free trade is the only way the world can benefit from these efficiencies. However, there are always special interest groups that want to expand themselves by restricting trade at the cost of their community so that they can charge greater rates for their products or services. Most of these special interest groups are unions or businesses that want to avoid competition. They have put forward several arguments to justify their stance as to why trade should be limited.

A common main argument for restricting trade is that trade decreases the amount of domestically accessible employment. While this applies to particular sectors, trade usually does not decrease general employment, as trade enables customers to pay reduced rates, which in turn enables them to purchase more products and services. Since many of these products and services are manufactured domestically, the enhanced consumer purchasing power stimulates both domestic and international job creation. In addition, 3rd world low-wage nations are becoming richer, enabling them to purchase more exports from industrialized countries.

A common main argument for restricting trade is that trade decreases the amount of domestically accessible employment. While this applies to particular sectors, trade usually does not decrease general employment, as trade enables customers to pay reduced rates, which in turn enables them to purchase more products and services. Since many of these products and services are manufactured domestically, the enhanced consumer purchasing power stimulates both domestic and international job creation. In addition, 3rd world low-wage nations are becoming richer, enabling them to purchase more exports from industrialized countries.