4.1.4- Protectionism Flashcards
1
Q
Tariffs
A
- a tax placed on an import to increase its price and decrease its demand
- can be imposed by the government to raise revenue and to restrict imports
- more likely to raise the final price for the consumer so they switch to domestic goods
2
Q
Why might tariffs be imposed?
A
- raise tax revenue
- environmental reasons
- protectionism
3
Q
Tariffs Adv, Dis
A
Adv-
- ensures domestic job security
- protects new infant businesses from MNEs
- raises tax revenue that can be spent on infrastructure
Dis-
- high import prices won’t put many off
- tariffs may just increase prices for consumers
- restricts the volume of trade
4
Q
Import Quotas
A
- a quota is a physical limit on the quantity of a good imported or exported. An example of physical control
- this will increase the share of the market available for domestic products
5
Q
Why are quotas imposed?
A
- allows a country to be sure of the amount of a good imported from the foreign country
- imposed to protect the jobs of domestic producers
- can be used as a bargaining chip to be used in negotiations or trade
6
Q
Quotas Adv, Dis
A
Adv-
- boosts local investment
- protects domestic business
- creates more job opportunity
DIs-
- when one country uses a quota, its trading partners will do the same thing, meaning there is less overall exporting opportunity for all producers, and higher prices for consumers
- difficult to measure the degree of protection a quota offers
7
Q
Other trade barriers
A
- product quality requirements- restricting certain products that don’t meet the standard quality
- subsidies or tax breaks- given to local producers to make their goods more competitive
- insistence on trade marks and copyright protection- this is why the UK isn’t full of fake handbags etc.
8
Q
Subsidies
A
- a method of the government protection their domestic market
- money is given to local producers to make their goods cheaper on the domestic market
