4.1.4 Protectionism

Question 1

What is protectionism

Answer 1

When a government enforces strategies to protect domestic businesses and jobs

Question 2

What are the forms of protectionism

Answer 2

• tariffs
• Quotas
• government legislation
• domestic subsidies

Question 3

What are tariffs

Answer 3

• a tax that has to be paid when certain products are imported into the country
• they discourage international trade by making imported goods more expensive than domestic products

Question 4

What are quotas

Answer 4

• trade restrictions that puts limits on the volume of particular products that can be imported within a certain amount of time

Question 5

Adavantages of tariffs and quotas

Answer 5

• helps domestic firms grow without competition from foreign firms

Question 6

disadvantages of tariffs and quotas

Answer 6

• restricts consumer choice
• lack of competition might make domestic firms less likely to improve efficiency and quality
• other countries may respond negatively

Question 7

What is government legislation

Answer 7

• laws to restrict international trade
• making trade extremely difficult and expensive
• can restrict a companies development

Question 8

What are domestic subsidies

Answer 8

• Sums of money provided by the government fir domestic firms
• allows products to have lower prices to compete with imports
  HOWEVER this costs the government lots of money which may increases taxes for those in the country

Question 9

What is a trade bloc

Answer 9

Associations between different governments to promote and manage trade

Question 10

What are the 3 trade blocs

Answer 10

• the USMCA ( unitedstates-Mexico- Canada agreement)
• the ASEAN (association of southeast Asian nations )
• the EU (European union)

Question 11

What countries are in ASEAN

Answer 11

• 10 countries including, Thailand, Malaysia and Indonesia

Question 12

Advantages of trading blocs

Answer 12

• causes a surge in demand for products
• fewer regulation makes it easier for business operations, more skilled workers, greater efficiency
• creates larger markets to increase sales volume
• Greater competition encourages innovation

Question 13

Disadvantages of a trading bloc

Answer 13

• more expensive to import from countries not in the bloc
• small firms ay be forced out of business due to the increased competition from foreign firms within the bloc
• businesses may have to heavily adjust their operations to comply with regulations increasing costs