Economics (Phd)
definition of tariff: A tax imposed on imported goods and services. Tariffs are used to restrict trade, as they increase the price of imported goods and services, making them more expensive to consumers. They are one of several tools available to shape trade policy. government impose tariff for two reason, either to generate high revenues or to protect they domestic industries from foreign rivals. import demand curve and export supply curve after the imposition of tariff
when tariff is imposed this means that the price of good being imported is raised, with this there will be a fall in demand, resulting in decrease in supply as shown in the figure above. the difference between pO and pt shows the revenue generated through tariff. sO shows export supply with no tariffs, but when tariffs are imposed there is a shift in supply curve meaning a fall in export supply shown by st.
2: why different countries adopt various protection policies.
Trade protectionism is used by countries when they think their industries are being damaged by unfair competition by other countries. It is a defensive measure, and it is usually politically motivated. It can often work, in the short run. However, in the long run it usually does the opposite of its intentions. It can make the country, and the industries it is trying to protect, less competitive on the global marketplace. there are various of way protection which are tariffs: this increase the prices of imported goods(explained above)
2:another way is when government subsidizes its industries with tax credit or through direct payment. this lowers the price of domestically produced goods.
3 quotas: A government-imposed trade restriction that limits the number, or in certain cases the value, of goods and services that can be imported or exported during a particular time period. advantages> a new growing domestic industry can be harmed and pushed downwards by other foreign industries, for e.g. if a country is producing bats
when tariff is imposed this means that the price of good being imported is raised, with this there will be a fall in demand, resulting in decrease in supply as shown in the figure above. the difference between pO and pt shows the revenue generated through tariff. sO shows export supply with no tariffs, but when tariffs are imposed there is a shift in supply curve meaning a fall in export supply shown by st.
2: why different countries adopt various protection policies.
Trade protectionism is used by countries when they think their industries are being damaged by unfair competition by other countries. It is a defensive measure, and it is usually politically motivated. It can often work, in the short run. However, in the long run it usually does the opposite of its intentions. It can make the country, and the industries it is trying to protect, less competitive on the global marketplace. there are various of way protection which are tariffs: this increase the prices of imported goods(explained above)
2:another way is when government subsidizes its industries with tax credit or through direct payment. this lowers the price of domestically produced goods.
3 quotas: A government-imposed trade restriction that limits the number, or in certain cases the value, of goods and services that can be imported or exported during a particular time period. advantages> a new growing domestic industry can be harmed and pushed downwards by other foreign industries, for e.g. if a country is producing bats