What is the impact of trade restrictions on domestic production?

Question

Domestic production remains the same

It only affects foreign production

It decreases domestic production

It increases domestic production

That is correct.

Answer 1

Trade restrictions, such as tariffs or import quotas, can impact domestic production by providing protection to local industries from foreign competition. This often leads to an increase in domestic production as local businesses have a larger share of the market without the pressure of competing against cheaper imports.

Therefore, the correct answer is:

It increases domestic production.