1. Reasons For Tarriffs/Protectionism

Question 1

Reason 1

Answer 1

To protect infant industries

Lack the EOS to compete, high costs per unit, can grow through government subsidies

Question 2

Reason 2

Answer 2

To raise revenue
Important for developing countries - low GDP means hard to collect income tax
Revenue spent of infrastructure, health and education
Improves economic growth

Question 3

Define protectionism

Answer 3

When a government imposes barriers to trade on forgein firms