Impact of Quotas on Domestic Economy Essay

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Curtailing ImportsOne of the primary goals of any government is to protect its citizens and industries from foreign competition. By curtailing imports, a government can artificially prop up domestic prices, making it harder for foreign competitors to gain a foothold in the market. It can also protect domestic industries from becoming too reliant on imported goods, which can be subject to sudden changes in price or supply. In addition, curtailing imports can help to ensure that essential goods and services are available in times of emergency or crisis (Green & Keegan, ). For all these reasons, governments often seek to curtail imports, even if it means higher prices for consumers.Artificial price supports are a controversial but sometimes necessary tool of government intervention in markets. By controlling the influx of foreign goods through tariffs and other trade restrictions, a government can artificially prop up domestic prices, making it more difficult for foreign competitors to sell their goods in the domestic market. This can have the effect of protecting domestic industries and jobs, while also generating revenue for the government through the collection of tariffs. However, artificial price supports can also lead to inflationary pressures and encourage cronyism and corruption. As such, governments tend to use them only as a last resort after all other options have been exhausted (Deardorff, 1987).

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Additionally, a country’s domestic industries are vital to its economy and self-sufficiency. If a nation becomes too reliant on imports, it risks becoming economically unstable and vulnerable to shocks. To…

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…and quotas can help to level the playing field between domestic and foreign producers. If foreign producers can sell their goods more cheaply than domestic producers, they may put the latter out of business. This can lead to job losses and a decline in the production of essential goods and services. Second, tariffs and quotas can help to generate revenue for the government. This is important because it can help to fund public services and other vital government programs. Finally, tariffs and quotas can help to protect infant industries. These are industries that are just starting out and may not be able to compete effectively against larger, more established foreign firms. By protecting these industries, governments can encourage their development and growth, which can have….....

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