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Flashcards in protectionism Deck (11):
1

protectionism

how the government tries to protect domestic industries and encourage people to buy from home businesses

2

tariff

a tax on imports to make them more expensive

3

why does the government set tariffs

raise revenue
protect jobs
protect infant industries
prevent dumping
prevent entry of undesirable or harmful goods
improve balance of payments

4

how are tariffs affected by PED

depends on elasticity of product e.g petrol vs trainers

5

quota

a physical limit on the quantity of imports allowed into a country

6

embaro

a complete ban on international trade (usually for political reasons)

7

problems with trade barriers

retaliation (what a country could do back in retaliation of a quota or tariff, could affect trade)
elasticity (less affected by quotas however prices will increase with limited supply)

8

government legislation

rules and regulations that make it difficult for importers to penetrate an overseas market

9

subsidies

financial support given to domestic producer to help compete with overseas firm

10

adv of subsidies

increase PM for domestic producers
doesn't need to be repaid
benefits domestic economy

11

disadv. of subsidies

high cost for government
competitiveness between domestic firms
only short term fix