Governments three primary means to restrict trade

Governments three primary means to restrict trade -...

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Governments three primary means to restrict trade: quota systems; tariffs; and  subsidies.  A quota system imposes restrictions on the specific number of goods imported into a  country. Quota systems allow governments to control the quantity of imports to help  protect domestic industries.  Tariffs are fees paid on imported goods. Tariffs increase the price that consumers pay  for the good, thus reducing the quantity of the good demanded and making the price  more in line with the price charged by domestic producers. Tariff profits may go to the  government or to developing industries.  Subsidies are grants given to domestic industries to help them develop and compete  with foreign producers. Through subsidies, domestic producers can charge less for their  goods without losing money due to outside grants. 
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This note was uploaded on 12/13/2011 for the course ECO 1310 taught by Professor Staff during the Fall '10 term at Texas State.

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