AI-generated practice question — model-generated for extra practice, not a previous-year CBSE board question.
(B) Tax on imports
A tax on imports is a trade barrier because it raises the price of imported goods, reducing their competitiveness and restricting foreign trade.
Source: Liberalisation of foreign trade and foreign investment policy, Chapter 4
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The textbook directly states: "Tax on imports is an example of trade barrier." Options A, C, and D relate to domestic fiscal/monetary policy and have no direct connection to regulating foreign trade. Examiners expect you to recall the definition of trade barrier and link it to import tax. Always remember: a trade barrier is any restriction that regulates the flow of goods between countries.