4.1.4

Question 1

Definition of Protectionism

Answer 1

When a government seeks to protect domestic industries from foreign competition

Question 2

Definition of a Tariff

Answer 2

A tax placed on imported goods

Question 3

Definition of a Quota

Answer 3

The physical limit of a good that can be allowed into a country

Question 4

3 Benefits of a Tariff

Answer 4

-Protect infant industries
-Increase in tax revenue
-Reduces dumping

Question 5

3 Drawbacks of a Tariff

Answer 5

-Increases cost (consumer)
-Reduces competition
-Reduces consumer choice

Question 6

3 Benefits of a Quota

Answer 6

-May encourage new start ups
-Reduces unemployment
-May seem less confrontational than tariff

Question 7

3 Drawbacks of a Quota

Answer 7

-Limit supply of a product, price increases
-May cause tension
-Domestic firms may be inefficient

Question 8

Definition of a Subsidy

Answer 8

Payments given to businesses to help lower cost of production from government

Question 9

2 Benefits of a Subsidy

Answer 9

-Reduced costs
-Remain competitive

Question 10

1 Drawback of a Subsidy

Answer 10

-May be Inefficient

Question 11

Definition of Government Legislation

Answer 11

Laws that restrict certain imports to protect consumers and businesses

Question 12

Benefit and Drawback of Legislation

Answer 12

+Allows domestic firms to grow
-Can lead to retaliation