Future Business Leader Achievments (FBLA) Economics Practice Exam

Which of the following is an example of a nontariff import barrier?

1. Raising taxes on imported products

2. Requiring special safety checks on all imported products

3. An import tax levied on a service instead of a product

4. An embargo

The correct answer is: Requiring special safety checks on all imported products

Requiring special safety checks on all imported products exemplifies a nontariff import barrier, as it involves conditions and regulations that must be met for goods to enter a country without imposing a direct tax. Nontariff barriers are trade restrictions that do not involve tariffs but can significantly impact the flow of imports. Such regulations can include health and safety standards, customs procedures, and specific technical requirements that products must comply with to be sold in a market. In this context, the requirement for safety checks adds a layer of compliance that can discourage or limit imports by increasing the costs and complexities of bringing products into the market. This is particularly relevant in industries where consumer safety is a priority, and regulators want to ensure high standards are met. Consideration of the other options helps clarify why they do not fit as nontariff barriers. Raising taxes on imported products directly influences the price of imports through tariff measures, while an import tax levied on a service also represents a form of tariff barrier, even if it's applied to services instead of goods. An embargo, on the other hand, is a complete restriction on trade with a specific country or the exchange of specific products and is generally enforced through legal and governmental means, representing a more extreme form of