b) Discuss four (4) reasons why the goverment implements trade protectionism
Protectionism is the goverments use of certain trade barriers such as tariffs and
import quotas in order to protect domestic producers from foreign competition.
Following discussiona are reasons why the goverment implements trade
protectionism.
Firstly, to protect infant industries. Those industries that cannot compete with
foreign producers. For example,Protons car.. Secondly, to prevent dumping. This
is because some countries involve in international trade to dump their excessive
output.Thirdly, to protect domestic employment. Unemployment may rise if a
country depends too much on imported good. Finally, industrial diversification.
This is to increase number of important sectors in the economy and reduce
dependent on imported product.
c) Explain four benefits of international trade to a nation
International trade enables countries to specialize in production of goods.There are
four benefits of international trade to a nation.
The first one is larger market. Through international trade, the market for product
or services are no longer confined to home market. Apart from domestic market, the
firms can also sells the product to all over the world. The second one is increase
competition. International trade increase competition and also promotes efficiency
in production. To survive competition, producers will have to ensure that they
produce high quality products at the lowest.at the lowest possible production costs.
The third one is it can be economic growth. Economic growth will increase the
income of people which in turn reduces the poverty rates in countries through
imports and foreign direct investment (FDI) inflows. Lastly, promote beneficial
relationship among countries. This will enhance cooperation, integration,
support and assistance among countries. It also can minimize political differences
and create more stable business in the world.