Theory question 108
International Trade(a) Explain the following terms: (i) import quotas; (ii) embargo; (iii) import licences; (iv) foreign exchange control.
(b) Outline three ways in which exports can be promoted in a country.
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(a)(i) Import quotas: limits on the quantity of a commodity that may be imported in a period.
(ii) Embargo: a total ban on the import or export of a commodity or on trade with a country.
(iii) Import licences: official permits required before goods can be imported, used to control the type and volume of imports.
(iv) Foreign exchange control: government regulation of the buying and selling of foreign currency to limit imports and capital outflow.
(b) Any three: export subsidies and tax relief; export credit and insurance; devaluation of the currency; improving product quality and standards; trade fairs and export promotion agencies; removing export duties; trade agreements; better infrastructure and ports.
Quotas limit quantity; embargoes ban trade completely.