Below are four distinct international trade instruments. Match each trade policy measure on the left with its defining economic characteristic or direct market impact on the right.
- Specific TariffA fixed monetary duty levied per physical unit of imported merchandise.
- Import QuotaA strict quantitative ceiling that generates quota rents for license holders.
- Export SubsidyA direct financial grant to domestic exporters that lowers sales prices in foreign markets.
- EmbargoA total diplomatic and legal prohibition placed on all trade with a specific target nation.
Answer
The correct pairings match Specific Tariff with a fixed monetary duty per unit imported, Import Quota with a quantitative ceiling generating quota rents, Export Subsidy with financial support to domestic exporters lowering foreign sales prices, and Embargo with a total prohibition on trade.
Each instrument corresponds precisely to its defining economic operation: specific tariffs charge fixed amounts per item unit, quotas impose strict quantitative ceilings, export subsidies grant state funds to boost export competitiveness, and embargoes impose absolute trade bans.
Step-by-Step Solution
Key Concept
Commercial Policy and Trade Barriers (Tariffs, Quotas, Embargoes, and Subsidies)