How Much You Know About Protectionism?

Tariffs are a form of trade barrier that impose additional taxes on imported goods, making them more expensive for consumers. This increased cost makes domestically produced goods comparatively cheaper and more attractive to consumers, thereby protecting domestic industries. Tariffs can be particularly beneficial for small-scale industries that may struggle to compete with larger, more established foreign companies. Therefore, the statement that tariffs are used to protect domestic and small-scale industries is true.

Tariff is a tax imposed on imported goods, which raises revenue for the government. When a country imposes a tariff on imported goods, it increases the price of those goods, making them less competitive compared to domestically produced goods. This encourages consumers to choose domestic products, which in turn boosts the domestic economy and generates revenue for the government through the collection of tariffs. Therefore, tariffs are a method of protection that not only helps to protect domestic industries but also raises revenue for the government.

Protectionism refers to the government policies that restrict international trade to help domestic industries. This means that the government imposes barriers such as tariffs, quotas, or subsidies to protect domestic industries from foreign competition. By limiting imports and promoting domestic production, protectionism aims to support local businesses, preserve jobs, and stimulate economic growth within the country.

Under trade protectionism, a government implements various measures to protect domestic industries and reduce competition from foreign companies. Enacting tariffs and import taxes are common strategies used to restrict imports and make foreign-made products more expensive. By doing so, the government aims to boost the price of foreign-made products, making them less competitive compared to domestic goods. Therefore, the correct answer is "All of the above" as all these actions are part of trade protectionism.

An embargo refers to a total ban on imported products. It is a government-imposed restriction that prohibits the importation of certain goods or products from specific countries. This measure is usually taken for political or economic reasons, such as to protect domestic industries, retaliate against another country, or enforce trade sanctions.

The term "subsidy" is suitable for this example because it refers to financial assistance provided by the government to support a specific industry or group. In this case, the EU is providing financial support to British farmers by paying them 10p for every pint of milk produced. This subsidy helps to incentivize milk production and support the farmers financially.

Trade protectionism refers to the practice of imposing restrictions on imports and promoting domestic industries by using measures such as tariffs, quotas, and subsidies. It is aimed at shielding domestic industries from foreign competition and protecting domestic jobs and businesses. Trade protectionism is also known as protectionism because it focuses on protecting the domestic economy from international trade competition.

The reason for protectionism could be all of the above. Protectionism is a trade policy that aims to protect domestic industries from foreign competition. Infant industries may need protection initially to grow and compete with established industries. National defense is another reason for protectionism as it ensures self-sufficiency in critical industries during times of conflict. Protectionism also serves as a means to protect domestic employment by reducing competition from foreign companies, thereby safeguarding jobs for domestic workers.

Restricting imports can help decrease the balance of payments deficit on the current account because when a country restricts imports, it reduces the amount of money flowing out of the country to pay for foreign goods. This can help decrease the current account deficit, which is the difference between a country's exports and imports. By reducing imports, a country can increase its export competitiveness and promote domestic industries, which can help improve the balance of payments and reduce the deficit.

Friedrich List is considered the father of protectionism because he was a German economist who advocated for the use of protective tariffs and trade barriers to protect domestic industries from foreign competition. He believed that developing countries needed to protect their industries in order to promote economic growth and industrialization. List's ideas on protectionism have had a significant influence on economic policies around the world.