Practicing Success

Target Exam

CUET

Subject

General Test

Chapter

General Knowledge

Topic

Economics

Question:

What do you understand by the term "Quotas" which is used for restricting imports in a country?

Options:

Reduction in the quality of imported goods

Tax on imported goods

Limit set for importing the goods

None of the above

Correct Answer:

Limit set for importing the goods

Explanation:

India adopted import substitution policy often called as "Inward looking trade strategy". Protection from imports 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.