1. What is Protectionism?
- Shielding a country's domestic industries from foreign competition by taxing imports
- An idea formed to create competition for home industries
- Removing restrictions or barriers on the fre e exchange of goods between countries
- A method to encourage imports to your country
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2. Why would Protectionism be negative in the long term?
- It can be expensive for a business to upkeep
- It means that business will get less revenue
- It weakens the protected industry because there would be no reason to innovate due to lack of competitors
- The revenue from tariffs may become too big for the government
3. Give some examples of trading blocs:
- BFC, NFFC, & SMO
- PTO, the BU, & AZEAN
- The EU, ASEAN, & NAFTA
- EQ, HTO, & TSFC
4. Advantages of being in a trading bloc:
- The benefits of free trade between countries in different blocs are lost
- Firms inside the bloc are protected from cheaper imports from outside e.g. EU shoe industry from China/Vietnam imports
- It reduces the beneficial effects of specialisation
- Products cost more for consumers because efficient producers from outside the bloc may have tariffs added to them
5. Definition of globalisation?
- "If everyone decided to travel around the globe"
- "The increased freedom and capacity of individuals and firms to undertake economic transactions with residents of other countries on a global scale"
- "The decreased freedom and capacity of individuals and firms to undertake economic transactions with residents of other countries and operate on a global scale"
- "When a business successfully enters every single market on the globe"
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