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Flashcards in Protection Deck (6)
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1

Protection

Any action taken by government designed to give domestic producers an official advantage over a foreign producer

2

Goal of protection

Increase domestic production
Reduce import consumption

3

Costs of protection

Wasted resources
Non-protected industries
Reduced exports
Consumers pay to cover costs
Net welfare loss, loss outweighs gains

4

What type of tax is a tariff?

Regressive, effects poor who rely on cheap overseas goods

5

Why are tariffs inefficient?

Deadweight loss

6

Subsidy

Form of protection that increases government expenditure, therefore reviewed regularly