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(i) Explain the term protectionism - Leaving Cert Business - Question 8 - 2022
Question 8
(i) Explain the term protectionism. (ii) Outline two protectionist measures that are used by governments/trading blocs.
Worked Solution & Example Answer:(i) Explain the term protectionism - Leaving Cert Business - Question 8 - 2022
Step 1
Explain the term protectionism.
Answer
Protectionism refers to the economic policy implemented by countries to limit foreign competition and protect their domestic industries. This often involves establishing trade barriers such as tariffs, quotas, and regulations that make it more challenging for foreign businesses to sell their products in the domestic market. The main goal of protectionism is to safeguard jobs, stimulate local production, and enhance the overall economic stability of the country.
Step 2
Outline two protectionist measures that are used by governments/trading blocs.
Answer
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Quota: A quota is a limit on the number of units of a particular product that can be imported or exported. For example, the European Union has implemented quotas on specific clothing items imported from countries like China to encourage domestic production.
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Tariff: A tariff is a tax levied on imported goods, which raises the price of these goods in the domestic market. For instance, a government may impose a tariff on New Zealand beef to encourage consumers to buy domestically produced meat instead.