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Chapter 20: Q 27. (page 494)

Why might a low-income country put up barriers

to trade, such as tariffs on imports?

Short Answer

Expert verified

Because of various reasons they want to increase trade barriers.

Step by step solution

01

Step 1. Definition

Trade barriers are defined as the protectionist form of trade that is put by the governments to have a limited trade between various nations and economies.

02

Step 2. Explanation

A low-income country put up barriers to trade, such as tariffs on imports because of the various reasons which are listed below:

a) they don鈥檛 want that their domestic firms will hurt by the other countries that is why they prevent foreign firms from throwing their huge number of goods at cheap rates in their country.

b) they want to protect their small firms or startups from big foreign giants which are already established.

c) they want to prevent their economy from unemployment because then their people favor foreign products

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