International TradePYQ - May 2019 (Inter)Question 163 of 20
All Questions

Which is a tariff barrier?

Options

AQuota
BImport Duty
CEmbargo
DVoluntary Export Restraint
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Correct Answer

✅ Option b — Import Duty

All Options:

  • AQuota
  • BImport Duty
  • CEmbargo
  • DVoluntary Export Restraint

Detailed Solution & Explanation

To determine which option is a tariff barrier, we need to understand what tariff barriers are. Tariff barriers are taxes or duties imposed on imported goods. • The key concept here is that tariff barriers are a form of taxation, which increases the cost of imported goods. • Tariff barriers are used by governments to protect domestic industries and to raise revenue. • Import Duty is a type of tariff barrier, as it is a tax imposed on imported goods, making them more expensive for consumers. The correct answer is right because Import Duty directly fits the definition of a tariff barrier. • On the other hand, options like Quota and Embargo are non-tariff barriers, as they restrict the quantity of goods that can be imported, rather than imposing a tax on them. • Voluntary Export Restraint is also a non-tariff barrier, as it is an agreement between countries to limit the quantity of goods that can be exported.

About This Chapter: International Trade

Paper

Paper 4: Business Economics

Weightage

10%

Key Topics

Theories, Trade Policy, Exchange Rates

This chapter explores trade between nations — why countries trade, the theories of Absolute and Comparative Advantage, Balance of Payments, Exchange Rate systems (Fixed vs Flexible), and India's trade policy including tariffs, quotas, and WTO rules.

View Official ICAI Syllabus

Exam Strategy Tip

Understand Comparative Advantage theory thoroughly — it's the foundation of international trade. Also focus on the Balance of Payments structure and what causes deficits.

More Questions from International Trade

Exchange rate determined by market forces is called:

Tariffs generally:

Balance of Trade refers to:

WTO was established in:

Devaluation of currency encourages:

Comparative Cost Advantage theory was given by:

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