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Chapter 34: Q. 20. (page 832)

Who does protectionism protect? From what does it protect them?

Short Answer

Expert verified

Protectionism plays one of the crucial role in the protection of domestic industries.

Step by step solution

01

Step 1. Meaning of protectionism.

Policy implemented by government that restrict international trade to help domestic industries. Protectionist policies are usually implemented with the goal to improves economic activity within a domestic economy but can also be implemented for safety or quality concerns.

02

Step 2. Protectionism protecting domestic industries.

By means of subsidies, tariffs, import quotas, or other restrictions or handicaps on domestic industries, helps to protect against foreign competition.

For example:- Government levied tariffs are the chief protectionist measures. Government raise the price of imported articles, which making them more expensive than domestic products.

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Most popular questions from this chapter

What are main reasons for protecting “infant industries”? Why is it difficult to stop protecting them?

How does protectionism affect the price of the protected good in the domestic market?

Why might the unsafe consumer products argument be a more effective strategy (from the perspective of the importing country) than using tariffs or quotas to restrict imports?

Microeconomic theory argues that it is economically rationale (and profitable) to sell additional output as long as the price covers the variable costs of production. How is this relevant to the determination of whether dumping has occurred?

What is dumping? Why does prohibiting it often work better in theory than in practice?
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