emerging and developing economies

Question 1

what is trade liberalisation

Answer 1

one or more countries agreeing to lower import tariffs and quotas

Question 2

why is importing a tariff as trade protectionism a good idea

Answer 2

protecting infant industries
- domestic supply increases from Q1to Q3
- allows furhter growth adn benefits from EOs

prevent dumping
- increase rpice on imports coming in if gov feels that price of goods are being dumped in artificially low market
- tariff can increase price - offsets artificial reduction in price

domestic employment
- domestic supply increases from Q1 to Q3 which means firms will need an increase in workers to supply those goods

increase gov rev
- increase tax revenue

improves CA position
- squeeze of imports following a tariff - new import is Q3 and Q4
- less import expenditure