Which of the following laws is considered a trade barrier?

Question

a) A company that produces furniture is shut down
b) federal aid given to unemployed workers from a factory
c) paying money to an industry to encourage it to make goods in the country ***
d) consumers deciding to purchase only locally made goods

Answer 1

c) paying money to an industry to encourage it to make goods in the country

Answer 2

Please explain why.

Answer 3

Paying money to an industry to encourage it to make goods in the country is considered a trade barrier because it provides financial support or incentives exclusively to domestic producers. This financial advantage can create a competitive disadvantage for foreign producers, placing them at a disadvantage when trying to access or compete in the local market. This practice can impede free trade by unfairly favoring domestic producers and restricting the entry of foreign competitors. Therefore, it is considered a form of protectionism and a trade barrier.