ACCA Applied Knowledge · Business and Technology · Political and legal factors affecting business
A government imposes a fixed limit on the number of imported cars allowed into the country each year. Which type of trade barrier is this?
This is an import quota. A quota sets a physical limit on the quantity of a good that can be imported in a period, unlike a tariff, which taxes imports, or an export subsidy, which assists exporters.
- AA tariff
- BAn import quotaCorrect
- CAn export subsidy
Explanation
A quota is a physical limit on the quantity of a good that may be imported. A tariff is a tax on imports, not a quantity limit. An export subsidy supports domestic exporters and does not restrict imports directly.
Did you get it right without looking?
One question tells you little. A timed set on Political and legal factors affecting business shows your real accuracy, how long you take and where you lose marks.
More Political and legal factors affecting business questions
- A utility company is a natural monopoly because duplicate pipe networks would be wasteful. Which government approach best controls its prici…
- A utility company is the only provider of water services in a region because duplicating the pipe network would be hugely wasteful. Which ap…
- Zenara Co, a clothing retailer, imports most of its goods. The government of the exporting country unexpectedly imposes a 15% tax on all clo…
- Zenta Ltd imports components. The government imposes a quota limiting the quantity of such components that can be imported, instead of a tar…
- A retailer collects customers' names, addresses and purchase histories through a loyalty scheme and then sells the list to a marketing firm …
- A government announces a large increase in public spending on road and rail construction, funded by borrowing. Which effect on construction …