ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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to make goods cheaper
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to expand their markets
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to protect domestic jobs
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to stimulate the economy
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Detailed explanation-1: -Protective tariffs have historically been employed to stimulate industries in countries beset by recession or depression. Protectionism may be helpful to emergent industries in developing nations. It can also serve as a means of fostering self-sufficiency in defense industries.
Detailed explanation-2: -Trade barriers are often enacted to protect industries and workers within a country. This is referred to as protectionism. For example, tariffs, quotas and embargoes make foreign goods more expensive and less available.
Detailed explanation-3: -A tariff has an immediate advantage for governments in that it will automatically generate tariff revenue (assuming the tariff is not prohibitive). Quotas may or may not generate revenue depending on how the quota is administered.
Detailed explanation-4: -Tariffs have three primary functions: to serve as a source of revenue, to protect domestic industries, and to remedy trade distortions (punitive function).
Detailed explanation-5: -The government imposes trade barriers so that their domestic trade can flourish without any foreign impact. Trade barriers are aimed at protecting domestic jobs. They help in improving trade deficits. They protect infant industries and protect against dumping.