What do you understand by the term "Quotas" in inward looking trade strategy?
Answer & explanation
Correct answer: option 3
The correct answer is option 3: Quantity of goods which can be imported
Inward looking trade strategy protected the domestic industries from foreign competition. Protection from import at that time took two forms: Tariffs and Quotas.
Tariffs are a tax on imported goods; they make imported goods more expensive and discourage their use. Quotas specify the quantity of goods which can be imported. The effect of tariffs and quotas is that they restrict imports and, therefore, protect the domestic firms from foreign competition.