Which of the following actions might be part of a protectionist economic policy?

• A. Subsidizing foreign producers
• B. Imposing tariffs on imported goods
• C. Encouraging free trade agreements
• D. Eliminating all trade barriers

Answer: (B)

Verified step by step guidance

1. Understand the concept of protectionist economic policy: it involves government actions and policies that restrict or restrain international trade, often to protect local businesses and jobs from foreign competition.
2. Identify the typical tools of protectionism, which include tariffs (taxes on imports), quotas (limits on the quantity of imports), subsidies to domestic producers, and import restrictions.
3. Analyze each option in the problem: 'Subsidizing foreign producers' encourages foreign production, which is not protectionist; 'Encouraging free trade agreements' promotes trade liberalization, the opposite of protectionism; 'Eliminating all trade barriers' removes restrictions, also opposite to protectionism.
4. Recognize that 'Imposing tariffs on imported goods' is a classic example of a protectionist policy because it raises the cost of foreign goods, making domestic goods more competitive.
5. Conclude that among the options, imposing tariffs aligns with protectionist economic policy.