Governments often use different measures (e.g. import duties) to protect their domestic markets from foreign suppliers. What is the basic motivation behind that? Select one – the most appropriate answer.

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BlackTom AI · Accepted Answer

Governments often employ measures such as import duties to influence domestic economic outcomes, so the reasoning here centers on protection of local industries.
Option 1: 'Making imported goods less expensive and thus more competitive on the local market.' This would undermine domestic producers rather than shield them, so it does not describe the typical protective motive.
Option 2: 'Making imported goods more expensive and thus less competitive compared to locally manufactured products.' This aligns with the classic protectionist rationale: by raising the price of imports, domestic firms face less competition, encouraging local production and safeguarding jobs and industries.
Option 3: 'Making the local market competition structure more complex to facilitate local manufacturers efficiency increase.' Increasing bureaucratic complexity is not a standard or primary motive of import protection policies; it would generally hinder, not help, efficient competition.
Option 4: 'Collecting more taxes at the expense of import duties imposed.' While tariffs do generate revenue, the main driver historically is protection of home industries and workers rather than revenue maximization, making this an incomplete description of the motivation.

econ_420_120255_249094 Lesson 1 & 2 Quiz

Governments often use different measures (e.g. import duties) to protect their domestic markets from foreign suppliers. What is the basic motivation behind that? Select one – the most appropriate answer.

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econ_420_120255_249094 Lesson 1 & 2 Quiz

Governments often use different measures (e.g. import duties) to protect their domestic markets from foreign suppliers. What is the basic motivation behind that? Select one – the most appropriate answer.

View Explanation

Log in for full answers

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Question at position 37 Tariffs or duties are taxes imposed by governments on imported goodsTrueFalse

Government taxes on products or services entering a country that primarily serve to raise prices on imports are known as

Tariffs artificially________ goods' prices and________ goods' demand.

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Government taxes on products or services entering a country that primarily serve to raise prices on imports are known as

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A tariff is a Blank ______ imposed on a product imported into a country.

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