Understanding Protectionism

What is one of the main goals of protectionism?

• To increase foreign competition

• To reduce domestic employment

• To shield local companies from foreign competition

• To lower the prices of imported goods

Which of the following is NOT a reason for a country to adopt protectionist policies?

• Protecting jobs

• Raising revenue

• Helping new industries

• Encouraging dumping

How do tariffs function as a trade barrier?

• By limiting the number of goods that can be imported

• By banning all foreign products

• By imposing a tax on imported goods to make them more expensive

• By providing financial support to foreign companies

What is the purpose of import quotas?

• To eliminate tariffs on imported goods

• To provide subsidies to foreign manufacturers

• To limit the number of goods that can enter a country from abroad

• To increase the number of foreign goods in the market

Why might a government provide domestic subsidies?

• To increase the cost of domestic goods

• To reduce the quality of local products

• To encourage foreign imports

• To support local businesses in competing with foreign companies