protectionism

Question 1

what is protectionism

Answer 1

any policy that restricts international trade in order to minimise competition

Question 2

What are tariffs and what impact do they have

Answer 2

they are taxes imposed on imported goods
they raise the price making less people buy imported goods. this means that instead they shop with domestic producers
its effectiveness depends on the PED of a product

Question 3

what are quotas

Answer 3

a limit of the amount of imported goods people can buy

this restricts supply in the market causing price to rise

Question 4

higher price and subsidies

Answer 4

subsidies can help domestic subsidies to lower prices and remain competitive

Question 5

problem with protectionism

Answer 5

reduces competition - encourages inefficiency
can provoke retailation
reduces income in exporting countries

Question 6

how protection constraints businesses

Answer 6

protectionism makes it harder to tap into new businesses