Understanding Trade Tariffs: Matching Types and Explanations

This question requires matching different types of trade tariffs listed in LIST-I with their corresponding explanations provided in LIST-II. Let's break down each type of tariff:

Analyzing Tariff Types

We need to understand the definition of each tariff type to correctly match them.

• Specific Tariff: This type of tariff is a fixed charge imposed per unit of an imported product. For example, a specific tariff might be '$10 per kilogram' of imported cheese.
• Ad valorem Tariff: This tariff is calculated as a percentage of the value of the imported goods. For instance, a 20% ad valorem tariff on a car means the duty is 20% of the car's declared value.
• Compound Tariff: As the name suggests, this tariff is a mix of both specific and ad valorem tariffs. It combines a fixed charge per unit with a percentage of the value.
• Variable Tariff: This tariff's rate is not fixed and can change. It's often used to adjust the price of imported goods to a predetermined level, typically to protect domestic producers. For example, if the world price of a commodity falls, the variable tariff increases to keep the landed price at the desired support level.

Matching Lists for Trade Tariffs

Based on the definitions above, we can match LIST-I with LIST-II:

• A. Specific Tariff matches with II. Fixed amount of money per unit.
• B. Ad valorem Tariff matches with I. Fixed percentage of the value of the commodity.
• C. Compound Tariff matches with IV. Combination of Ad valorem and Specific Tariff.
• D. Variable Tariff matches with III. Duty fixed to bring the price of imported commodity to the level of domestic support price.

Correct Option Identification

The correct matching derived is A-II, B-I, C-IV, D-III. Now, let's find the option that reflects this matching:

Comparing our matches with the given options:

1. A-I, B-II, C-III, D-IV
2. A-II, B-I, C-IV, D-III
3. A-III, B-IV, C-II, D-I
4. A-IV, B-III, C-II, D-I

Option 2 perfectly aligns with our analysis.

Summary of Tariff Matching

Here is a summary table of the correct matches:

Therefore, the correct answer is the option that lists these matches.