Correct Option
The correct option is 1 and 3 only.
Explanation
Trade barriers are measures used by governments to regulate the flow of goods and services across international borders. These are broadly classified into tariff barriers (taxes/duties) and non-tariff barriers (quantitative restrictions, regulations, and administrative controls). A quota is a prominent non-tariff barrier.
Statement-wise Analysis:
- Statement 1 is Correct: A quota is a specific type of trade barrier imposed by the government. It restricts the physical volume or value of imports allowed into a country during a specific period to protect domestic industries from foreign competition.
- Statement 2 is Incorrect: A quota places a restriction on the quantity (volume or number) of goods, not the quality. Restrictions based on quality, safety, or hygiene standards are classified as Technical Barriers to Trade (TBT) or Sanitary and Phytosanitary (SPS) measures, distinct from quantitative quotas.
- Statement 3 is Correct: Under a quota system, the government explicitly decides and fixes the maximum quantity of a specific commodity that can be imported. Unlike tariffs, which influence import volume indirectly by raising prices, quotas directly limit the supply.
Key Takeaway:
Quotas are quantitative restrictions (Non-Tariff Barriers) that directly limit the amount of imports, whereas Tariffs are fiscal measures (taxes) that discourage imports by increasing their cost.