Quota is defined as what?

Quota is defined as what?

• A. A tax on imported goods
• B. A limit on the quantity of goods that can be imported
• C. A restriction on exports
• D. A subsidy for exports

Answer: (B)

A quota is a limit on the quantity of goods that can be imported. It sets the maximum amount that can enter a country, regardless of price, to protect domestic industries from foreign competition. Unlike a tariff, which raises the price of imports and can generate government revenue, a quota directly caps how much can come in. It isn’t about restricting exports, and it isn’t a subsidy for exporting—those are different tools used to influence trade in other ways.

A quota is a limit on the quantity of goods that can be imported. It sets the maximum amount that can enter a country, regardless of price, to protect domestic industries from foreign competition. Unlike a tariff, which raises the price of imports and can generate government revenue, a quota directly caps how much can come in. It isn’t about restricting exports, and it isn’t a subsidy for exporting—those are different tools used to influence trade in other ways.