Protectionism Flashcards
define protectionism ?
occurs when countries place restrictions on imports into the economy (involve higher tariffs or quotas)
Why are import controls in place?
aim to cushion domestic businesses and industries from overseas competition
what are tariffs?
aim to protect domestic industries from overseas competition by increasing the relative price of imports, causing a fall in import demand , meaning higher proportion of domestic demand
what do tariffs generate?
tax revenues for govs who levy tariffs and improve a nations trade balance
What is dumping?
when firms sell products abroad at below costs or significantly below prices in the home market
What are anti-dumping duties?
raise the price of a product to help protect local producers
What are the options when introducing an anti-dumping import duty?
- ad volorem duty
- variable duty
- specific duty
What is a specific duty?
a fixed value for a certain amount of goods
What is a variable duty?
a minimum import price
