Methods of Protectionism

The Egyptian government reduced tariffs on imported Japanese trucks.

What is most likely to benefit in Egypt from this reduction?

• government revenue

• the balance of payments

• truck operators

• truck producers

Country X decides to protect its industries with tariffs.

What would be most likely to result in the short run?

• cheaper exports from country X

• lower costs for industry in country X

• more expensive imports to country X

• more specialisation in country X

What is a benefit of tariffs?

• increased choice

• increased government revenue

• more competition

• more trade

What directly sets a fixed limit on the quantity of goods which can be imported?

• administrative regulations

• foreign exchange controls

• quotas

• tariffs

The introduction of a tariff on imported goods is likely to

• ensure that the domestic industry becomes more efficient.

• increase the demand for domestically produced goods.

• reduce the price of domestically produced goods.

• reduce the price of imported goods into a country.

What lowers the cost of producing goods for export?

• a quota

• a subsidy

• a tariff

• foreign exchange control

A major market for bananas from Latin America is the European Union (EU). In 2006, the EU

imposed a 35 % tariff on banana imports from Latin America but not on substitutes from other regions.

What impact is the tax likely to have had on the price of Latin American bananas in the EU and the revenue of Latin American producers?

• EU price of Latin American bananas decreases

  revenue of Latin American producers decreases

• EU price of Latin American bananas decreases

  revenue of Latin American producers increases

• EU price of Latin American bananas increases

  revenue of Latin American producers increases

• EU price of Latin American bananas increases

  revenue of Latin American producers decreases

Drinks producers in India are resisting plans to remove tariffs on imported drinks. They claim that

a reduction in tariffs would destroy the emerging drinks industry with large-scale imports of cheap

drinks.

Which argument for protectionism are they putting forward?

• the declining industry argument

• the infant industry argument

• the infant industry argument

• the sunset industry argument