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Chapter 33: Q.7 (page 803)

If the removal of trade barriers is so beneficial to international economic growth, why would a nation continue to restrict trade on some imported or exported products?

Short Answer

Expert verified

To protect domestic producers and consumers

Step by step solution

01

Step 1. Introduction

International trade can be defined as the exchange of goods, services, and resources across international boundaries. Trade barriers refer to the restriction imposed by the government on trade.

02

Step 2. Explanation

Trade barriers cause the prices of products to increase in the domestic market and cause quantity to decline. Though the removal of trade barriers is beneficial for both parties, certain drawbacks are associated with free trade.

Some barriers are placed to protect infant industries that are not mature enough to face foreign competition. barriers are also placed to protect the domestic economy from being too dependent on another country for essential products. removing these barriers can be harmful.

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