Question

Imposing some sort of cost on trade that raises the price of the traded products is MOST LIKELY an example of

A)
a trade barrier.
B)
a trade surplus.
C)
a trade deficit.
D)
a trade incentive.

Answer 1

A trade surplus or trade deficit (answers B and C) refer to the relationship between the exports and imports and not to the cost on trade.

A trade incentive is something that encourages the trade; cost on trade is not an incentive.

The correct answer is: a trade barrier. A trade barrier can come in the form on extra cost on the trade to raise the price.