Topic

International Trade

Instructions

Read pages 854-857 of Economics.

Consider the following as you read:

What is the validity of the most frequently presented arguments for protectionism?
What are the economic effects of tariffs and quotas?

Answer preview

In economics, protectionism is defined as an economic policy that aims at preventing trade between nations. In most scenarios, trade protectionism makes it simpler for a firm to purchase what is requires and sell goods in global markets. There are many arguments that have been presented about protectionism. One of the arguments is that protectionism has been helping industries which are declining because of increasing import competition. It is clear that relocating resources out of an industry might be expensive. In addition to this, individuals who lose their jobs as a result of increased imports usually have challenges in searching new jobs and normally suffer considerable decline in earnings.

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