CH 3: Protectionism and Free Trade
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Questions and Answers

What is the primary goal of protectionism?

  • To reduce economic diversification and specialize in a single industry
  • To protect local businesses and jobs from foreign competition (correct)
  • To encourage imports and increase dependency on foreign goods
  • To promote free trade and remove trade barriers

    • Which of the following is NOT a common tool used to implement protectionism?

  • Tariffs
  • Subsidies
  • Quotas
  • Free trade agreements (correct)

    • What is the main argument for protectionism in terms of national security?

  • To reduce dependency on imports
  • To promote economic diversification
  • To protect infant industries
  • To ensure self-sufficiency in crucial industries (correct)

    • What is the primary benefit of free trade according to the specialization argument?

    <p>Nations can focus on the production of goods for which they have a comparative advantage</p> Signup and view all the answers

    What is the term for foreign companies selling goods at a lower cost than they are produced domestically?

    <p>Dumping</p> Signup and view all the answers

    What is a consequence of free trade, according to the access to goods and services argument?

    <p>Consumers have access to a wider variety of goods and services, often at lower prices</p> Signup and view all the answers

    What is the primary goal of free trade?

    <p>To promote the unrestricted exchange of goods and services across international borders</p> Signup and view all the answers

    What is one of the benefits of international trade?

    <p>Promoting more efficient allocation of resources globally</p> Signup and view all the answers

    What is the primary goal of South Africa's export promotion policies?

    <p>To increase participation in the global market</p> Signup and view all the answers

    What is the purpose of import substitution policies?

    <p>To strengthen domestic industries</p> Signup and view all the answers

    Which of the following is a benefit of international trade in terms of economic growth?

    <p>Increasing the potential for economic growth</p> Signup and view all the answers

    Which trade protocol is South Africa involved in?

    <p>SADC (Southern African Development Community)</p> Signup and view all the answers

    What is a result of South Africa's involvement in international trade?

    <p>Increased innovation</p> Signup and view all the answers

    Which of the following is a partner of South Africa in international trade?

    <p>China</p> Signup and view all the answers

    What is a goal of South Africa's trade policies?

    <p>To promote domestic industries</p> Signup and view all the answers

    What is a potential outcome of promoting economic efficiency globally?

    <p>More efficient allocation of resources</p> Signup and view all the answers

    What is the primary objective of South Africa's export promotion policies?

    <p>To encourage local firms to export their goods</p> Signup and view all the answers

    What is the purpose of South Africa's import substitution policies?

    <p>To strengthen domestic industries and reduce dependency on foreign goods</p> Signup and view all the answers

    Which of the following is a benefit of economic growth?

    <p>Expanded markets and investment opportunities</p> Signup and view all the answers

    What is a benefit of international trade in terms of economic growth?

    <p>Expanded markets and investment opportunities</p> Signup and view all the answers

    Which trade protocol is South Africa involved in?

    <p>SACU</p> Signup and view all the answers

    What is a result of South Africa's involvement in international trade?

    <p>Increased participation in the global market</p> Signup and view all the answers

    Which of the following is a partner of South Africa in international trade?

    <p>China</p> Signup and view all the answers

    What is the primary objective of tariffs, quotas, and subsidies in the context of protectionism?

    <p>To protect local businesses and jobs from foreign competition</p> Signup and view all the answers

    Which of the following arguments for protectionism is related to the idea of self-sufficiency?

    <p>National Security</p> Signup and view all the answers

    What is a benefit of free trade, according to the economies of scale argument?

    <p>Lowering production costs</p> Signup and view all the answers

    What is the primary reason for implementing protectionism, according to the infant industry argument?

    <p>To protect emerging domestic industries from international competition</p> Signup and view all the answers

    What is a consequence of free trade, according to the fostering innovation argument?

    <p>Fostering innovation</p> Signup and view all the answers

    What is the primary objective of free trade, according to the international relations argument?

    <p>To promote the unrestricted exchange of goods and services</p> Signup and view all the answers

    What is the primary reason for implementing protectionism, according to the preservation of jobs argument?

    <p>To safeguard jobs against cheaper imported goods</p> Signup and view all the answers

    What is a key implication of protectionism on global trade?

    <p>Restricted international trade</p> Signup and view all the answers

    Which argument for protectionism is related to the idea of supporting emerging industries?

    <p>Infant industry argument</p> Signup and view all the answers

    What is a key benefit of free trade, according to the economies of scale argument?

    <p>Lower production costs</p> Signup and view all the answers

    What is the primary objective of tariffs, quotas, and subsidies in the context of protectionism?

    <p>To restrict international trade</p> Signup and view all the answers

    Which of the following is a consequence of free trade, according to the specialization argument?

    <p>Increased productivity</p> Signup and view all the answers

    What is a key argument for protectionism in terms of national security?

    <p>Self-sufficiency in crucial industries</p> Signup and view all the answers

    What is a consequence of protectionism, according to the preservation of jobs argument?

    <p>Safeguarding of jobs against foreign competition</p> Signup and view all the answers

    What is a primary goal of promoting economic efficiency globally?

    <p>Enhancing productivity and innovation</p> Signup and view all the answers

    What is a key objective of South Africa's export promotion policies?

    <p>Encouraging local firms to export goods</p> Signup and view all the answers

    What is a potential outcome of South Africa's involvement in international trade?

    <p>Increased potential for economic growth</p> Signup and view all the answers

    What is the primary objective of South Africa's import substitution policies?

    <p>Encouraging local production of goods previously imported</p> Signup and view all the answers

    What is a benefit of economic growth?

    <p>Increased potential for economic growth</p> Signup and view all the answers

    What is a key aspect of South Africa's trade relationships?

    <p>Involvement in SACU, SADC, and partnerships with major economies</p> Signup and view all the answers

    What is a goal of South Africa's trade policies?

    <p>Promoting economic efficiency and growth</p> Signup and view all the answers

    What is a benefit of international trade?

    <p>Increased potential for economic growth and innovation</p> Signup and view all the answers

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