Question

Assertion (A): Tax on imports known as a trade barrier.
Reason (R): It decreases the price of imported commodities.


[1 mark]
Both A and R are true and R is the correct explanation of A
Both A and R are true but R is not the correct explanation of A
A is correct but R is wrong
A is wrong but R is correct

Answer 1

Answer:

Tax on imports imposed by the government to regulate foreign trade and investment is known as a trade barrier. Government imposed barriers on foreign trade and investment for the following reasons : (i) The competition from importers would have crippled the new-born industries of India.