Role of government in controlling international trade
Answers
Answer:
Governments and businesses are interdependent, and when it comes to international business, this interdependence has grown even further by the globalization of economy.
For any business, the policies of the local government can have deciding implications. The restrictions placed on business, the requirements of licensing and other permissions, regulations, formalities, taxes - all these have a direct impact on the ease of doing business. Every law that the government makes has a cost of compliance, the burden of which falls on the business enterprise, and if this cost becomes very high, it is likely to make business less profitable.
Explanation:
Government uses tariffs to protect domestic industries from foreign competition. As a result of a tariff, domestic firms typically are able to charge a higher price while also producing more output. ... The supply curve SFT is the world supply of the good to the U.S. market assuming free trade — no tariffs.