Th4.3: IS - Protectionism

Question 1

What does protectionism do?

Answer 1

allows domestic industries to grow by keeping foreign goods out and protects them from strong competition

Question 2

They can use a policy of import substitution, where…

Answer 2

where they deliberately attempt to replace imported goods with domestically produced goods by adopting protectionist measures

Question 3

What will this do in the short run and allow the industry to do?

Answer 3

create jobs in the short run and will allow the industry to develop, perhaps to the extent where the barriers can be removed and the industry can compete globally

Question 4

What are the disadvantages of protectionism?

Answer 4

it means countries lost out from the benefits of specialisation and comparative advantage and could cause inefficiency, since domestic producers suffer from a lack of competition.
other countries are also likely to retaliate