Protectionism Reasons

What is one main reason countries practice protectionism?

• To increase exports
• To protect domestic industries
• To reduce government revenues
• To create competition

Which argument supports protecting domestic employment through tariffs?

• To reduce structural unemployment
• To increase consumer surplus
• To attract foreign investment
• To ensure product standards

What is a criticism of protecting sunset industries?

• It promotes innovation
• Delays resource reallocation
• Encourages reliance on subsidies
• Benefits outweigh the costs

How does protectionism help to compete with foreign low-cost labour competition?

• Lower domestic prices
• Increase innovation
• Allows domestic wages to remain higher

• Boost domestic innovation

What is an example of a strategic reason for protectionism?

• Encouraging free trade
• Supporting industries in wartime
• Supporting developing nations
• Increasing employment rates

Why might governments protect infant industries?

• To gain economies of scale
• To protect against dumping
• To ensure fair competition
• To gain market access

What is the argument that developed countries should not be able to protect infant industries?

• Access to large capital markets
• Limited political power
• High cost of raw materials
• No government support

Why might countries want to avoid over-specialisation?

• To reduce reliance on few products
• To avoid a fall in demand for that product

• To diversify exports
• To enhance global trade

What is an example of the impact of over-specialisation?

• Increased imports
• Declining industry revenue
• Synthetic product innovation
• Better trade agreements

What is dumping in international trade?

• Selling goods below cost price
• Increasing goods' prices
• Raising import tariffs
• Exporting goods at a loss