Paper 2 · International Trade
A negative effect of protectionism on a country's own consumers is that
Athey are unable to buy goods made inside their own country
Bthey must pay for imported goods in a foreign currency
Cthey receive lower wages from the firms that employ them
Dthey pay higher prices for a narrower range of goods
Explanation: A tariff raises the price of the imported good, and shielding local firms from competition removes the pressure on them to keep prices down, improve quality or innovate. Consumers therefore face dearer goods and less choice than they would under free trade.
Derived from ZIMSEC Economics 4050/2 Paper 2, June 2023, Q2