Ch 25 Flashcards
What is protectionism?
Protectionism refers to government policies that restrict international trade to protect domestic industries.
What is an embargo?
An embargo is a complete ban on international trade, usually for political reasons.
What is an import quota?
An import quota is a physical limit on the quantity of imports allowed into a country.
What are infant industries?
Infant industries are new industries that are not yet established and may need protection from competition.
What is dumping?
Dumping occurs when foreign producers sell goods below cost in a domestic market, harming local producers.
What is a tariff?
A tariff is a tax designed to help domestic businesses by making imports more expensive.
What are trade barriers?
Trade barriers are measures designed to restrict trade, which can include tariffs, quotas, and embargoes.
What is a trade war?
A trade war occurs when countries try to damage each other economically by imposing trade barriers.
How can tariffs raise government revenue?
Governments can raise revenue by imposing tariffs on imports, which can improve living standards.
What is the impact of protectionism on domestic businesses in the short term?
In the short term, protectionism benefits domestic businesses by reducing competition and increasing sales volume.
What are domestic subsidies?
Domestic subsidies include financial support such as grants or low-interest loans to domestic producers.
What is a potential long-term effect of protectionism on businesses?
In the long term, businesses may benefit more from free trade, which encourages competition and innovation.
What is a consequence of protectionism?
Protectionism can lead to retaliation from overseas governments, causing issues for both businesses and countries.
