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From course:

Economics A Level (DONEEEEEEE)

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Question:

Why may Protectionism not be the Greatest Policy?

Author: eric_galvao



Answer:

-If you Restrict Imports, you risk Reducing Specialisation and Divert Resources away from their most Efficient Use. This affects Allocative and Productive Efficiency -Prices will usually be higher for Consumers and Producers, due to a lack of Specialisation and Competition. -Big Impact on the poorest of Society, potentially leading to Increases in Inequality -Once Trade Barriers are set up, can be hard to Remove them. May have led to a Dependence on the Barriers -Trade Barriers may also lead to Trade War and reduce overall World Trade and Exacerbate the other problems mentioned


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