When Importing 10 questions in an 8KB file in Moodle XML format (possibly others as well) this error appears.

An unknown problem occurred while uploading the file '{$a}' (perhaps it was too large?)

More information about this error
Stack trace:

• line 398 of /lib/setuplib.php: moodle_exception thrown
• line 80 of /question/import.php: call to print_error()

I tried uploading the file first and then selecting it from Legacy Course Files then importing the questions and the same error occured.