Which of the following best describes the motivation behind trade protectionism?

• A. To maximize global economic efficiency
• B. To encourage free movement of goods and services across borders
• C. To reduce government intervention in the market
• D. To shield domestic industries from foreign competition

Answer: (D)

Verified step by step guidance

1. Understand the concept of trade protectionism: It refers to government actions and policies that restrict or restrain international trade, often with the intent to protect local businesses and jobs from foreign competition.
2. Recognize the motivation behind trade protectionism: The primary goal is to shield domestic industries from foreign competitors who might offer cheaper or more attractive goods and services, which could harm local producers.
3. Contrast trade protectionism with free trade: Free trade encourages the unrestricted movement of goods and services across borders to maximize global economic efficiency, whereas protectionism imposes barriers like tariffs, quotas, or subsidies.
4. Identify that trade protectionism involves increased government intervention: This is done to support domestic industries, which is the opposite of reducing government intervention in the market.
5. Conclude that the best description of the motivation behind trade protectionism is to protect domestic industries from foreign competition, rather than maximizing global efficiency or encouraging free trade.