Question

Mediclinic Medforum, a private hospital in Pretoria, needs to import 10 ultrasound machines from the United States (US) at a total value of US$415 000. However, the South African government will only allow the hospital to import five machines. Which trade policy measure is being implemented here?

a. import tariff
b. import quota
c. exchange control
d. local content requirements

Answer 1

The limitation placed on the importation of ultrasound machines by the South African government is known as an import quota, which is a numerical restriction on the number of items that can be imported.

Step-by-step explanation:

The South African government's limitation on the number of ultrasound machines that Mediclinic Medforum can import from the United States is an example of an import quota.

An import quota is a trade policy measure that imposes a numerical limit on the quantity of a product that can be imported into a country. Similar measures have been used historically, such as in the 1980s when the Reagan Administration imposed a quota on Japanese automobiles, and through the international Multifiber Agreement which regulated textile market shares and established specific quotas for textile imports.