Government Policy and International Trade

Front

Free Trade

Back

Absence of barriers to the free flow of goods and services between countries

Front

What is the purpose of tariffs?

Back

To help domestic producers compete against low-cost foreign imports

Front

What is the main objective of subsidies?

Back

To help domestic producers gain export markets

Front

What is the purpose of an import quota?

Back

To restrict the quantity of some good that may be imported into a country

Front

Dumping

Back

Selling goods in a foreign market below their cost of production

Front

What is the purpose of antidumping policy?

Back

To punish foreign firms that engage in dumping

Front

Infant Industry Argument

Back

An industry should be protected until it can develop and be viable and competitive internationally

Front

What is the main reason for governments to intervene in international trade for political reasons?

Back

Protecting jobs and industries

Front

What is the main reason for governments to intervene in international trade for economic reasons?

Back

Boosting the overall wealth of a nation

Front

What is the purpose of local content requirements?

Back

To demand that a specific fraction of a good be produced domestically