Political Economy Economic Systems Questions
Protectionism is an economic policy that involves the imposition of barriers, such as tariffs, quotas, and subsidies, to protect domestic industries from foreign competition. The main objective of protectionism is to shield domestic industries from foreign competition in order to promote their growth and development. This can be done by making imported goods more expensive through tariffs or quotas, thereby making domestic products more competitive in the market. Protectionism is often implemented to safeguard domestic employment, preserve national security, and maintain a favorable balance of trade. However, it can also lead to higher prices for consumers, reduced efficiency, and retaliation from other countries through trade wars.