What affects International trade?

Which things affect international trade

Quotas

Exchange rate

Tariff barriers

 

Impact of Quotas on international trade

Quota limits the number of imported goods entering the country

For example

The government declares that only 10,000 bars of chocolate can be imported from a foreign country

Quota discourages international trade

 

Impact of Exchange rates on international trade

An appreciation in a country’s exchange rate causes the price of imports to decrease and the price of exports to increase

Imports increase

Exports decrease

 

Impact of Tariff barriers on international trade

Tariff is a tax imposed by the government on the goods imported from a foreign country

Eg. Buyer has to pay $3 to the government for every bar of chocolate bought from a foreign country

Tariff barriers discourage international trade