4.7.2 Trade Barriers

• Trade barriers are government policies designed to restrict or impede international trade
• Quotas are quantitative limits on the amount of goods that can be exported

  False
• Subsidies are government assistance to domestic industries
• What is the primary effect of trade barriers on domestic industries?

  Protection from competition
• Match the trade barrier type with its effect:

  Subsidies ↔️ Lower production costs

  Non-tariff Barriers ↔️ Increase import costs
• Tariffs generate revenue for the government
• Tariffs reduce competition for domestic producers

  True
• What is the primary effect of non-tariff barriers on market access?

  Reduced market access
• One purpose of tariffs is to generate government revenue
• Quotas increase the volume of imports

  False
• Embargoes are often imposed for political reasons


  True
• What is one effect of embargoes on domestic industries?

  Domestic industry protection
• The US embargo against Cuba is a notable example of an embargo.

  True
• What is the primary purpose of embargoes?

  Political pressure
• Embargoes can cause severe economic disruption
• How do trade barriers affect international trade relationships?

  Reduced volumes, strained relationships
• The WTO resolves trade disputes between member states to ensure compliance with trade agreements.


  True
• Match the WTO with its role in global trade:

  Increased economic growth ↔️ Greater market access for businesses

  Reduced trade disputes ↔️ Improved stability
• Tariffs increase the prices of imported goods and protect domestic industries
• Match the trade barrier type with its description:

  Tariffs ↔️ Taxes on imported goods

  Quotas ↔️ Quantitative limits on imports

  Subsidies ↔️ Government assistance to domestic industries
• Tariffs generate revenue for the government
• Quotas reduce consumer choice by limiting the availability of imported goods.


  True
• What is the primary purpose of an embargo?

  Political pressure or security
• Subsidies increase the competitiveness of domestic producers by allowing them to undercut foreign competitors on price
• By lowering costs, subsidies allow domestic producers to undercut foreign competitors on price
• Foreign producers find it easier to compete with subsidized domestic goods.

  False
• Sanctions are trade restrictions imposed on a country or group of countries, typically for political or security reasons
• Sanctions can severely impact a country's economy.


  True
• What is an example of a country subject to US sanctions?

  Iran
• Trade barriers foster international trade partnerships.

  False
• What is a tariff in the context of trade barriers?

  Tax on imported goods
• What is an embargo in international trade?

  Complete trade prohibition
• Sanctions are a type of trade barrier used to influence political relationships


  True
• What do quotas limit in international trade?

  Import volume
• Tariffs are used to make imported goods more affordable for consumers

  False
• What is one effect of tariffs on import prices?

  They increase import prices
• Trade barriers include tariffs, quotas, subsidies, and non-tariff barriers
• Tariffs protect domestic industries by increasing import prices


  True
• How do tariffs affect domestic prices of imported goods?

  They increase prices
• Which trade barrier generates government revenue?

  Tariffs