why do governments sometimes restrict trade?

To protect domestic industries and workers

To increase consumer surplus

To decrease productivity

To support international industries and workers

That is correct.

1 answer

Governments sometimes restrict trade primarily to protect domestic industries and workers. This is often done through measures such as tariffs, quotas, and subsidies, which aim to shield local businesses from foreign competition. The rationale is that protecting local industries can help preserve jobs and promote economic stability within the country.

While there may be other reasons, such as national security concerns or efforts to retaliate against unfair trade practices, the primary goal is usually centered around safeguarding domestic economic interests.

The other options you've mentioned, such as increasing consumer surplus or decreasing productivity, do not typically align with the goals of trade restrictions. In fact, trade restrictions often lead to higher prices for consumers (reducing consumer surplus) and can lead to inefficiencies in the economy (potentially decreasing productivity) as they limit competition and innovation. Supporting international industries and workers is not a primary reason for trade restrictions; often, the intent is quite the opposite.