4.1.4 Protectionism

Question 1

Why might a government put protectionism in place?

Answer 1

• Protect jobs.
• Protect infant industries.
• Prevent dumping. (where foreign businesses sell products lower than domestic firms.)
• Raise revenue from tariffs.
• Prevent entry of harmful goods.
• Improve balance of payments.

Question 2

What will tariffs do to consumer goods?

Answer 2

Making them more expensive, which will lower demand.