(PAPER 3) 4.1.4 protectionism

Question 1

protectionism definition

Answer 1

an approach used by a government to protect domestic producers

Question 2

reasons why a country might pursue protectionism

Answer 2

1. protect jobs
2. protect infant industries
3. prevent dumping

Question 3

tariff definition

Answer 3

a tax on imports

Question 4

reasons why imposing a tariff is a GOOD strategy

Answer 4

1. makes imports more expensive so puts consumers off

2. raises revenue for the government

Question 5

reasons why imposing a tariff is a BAD strategy

Answer 5

1. chance of retaliation from other countries

2. can restrict consumer choice if they are unable to buy the product

Question 6

quota definition

Answer 6

a physical limit on imports

Question 7

reasons why imposing a quota is a good strategy

Answer 7

1. less threat of competition for domestic producers

2. domestic firms encouraged to increase production, hiring extra workers

Question 8

reasons why imposing a quota is a bad strategy

Answer 8

1. no extra tax revenue is raised for the government

2. pushes up prices for domestic consumers

Question 9

embargo definition

Answer 9

a complete ban of imports from a country (normally for political reasons)

Question 10

2 other forms of protectionism

Answer 10

government legislation and subsidies

Question 11

how would government legislation help to reduce imports

Answer 11

other countries may not have the same safety standards when manufacturing their products so it will put them off trying to export them to countries with tougher laws

Question 12

how would subsidies help to reduce imports

Answer 12

supports domestic firms’ competitiveness as subsidies reduce costs of protection so price can be lowered