Skip to main content

Protection Policy

The policy of safe guarding the domestic economy from international competition is known as protection policy. In other word, protection is the restriction on the import of goods and services from abroad and encouraging domestic industries to make their product in favorable position by providing subsidies or support prices. 

Protection policy uses two types of instruments to protect domestic industries.

Tariff barrier

Under this, government imposes high custom duties on import of foreign goods. It will make foreign goods relatively expensive than that of domestic products and import declines and increases demand of domestic goods.

Non-tariff barrier

Under this policy, government control import applying the quota system exchange control, withdraw of subsidy and trade by government itself.


Labels:

Comments

Post a Comment

Popular posts from this blog

Market Economy Vs Command Economy

Generally, there are two fundamentally different ways of organizing an economy. Market and Command Economy. A market economy is one in which individuals and private firms make the major decisions about production and consumption. In a market economy, decisions are made in markets, where individuals and enterprises voluntarily agree to exchange goods and services, usually through payments of money. A system of prices, of markets, of profits and losses, of incentives and rewards determines the what (profits), the how (costs) and the form whom (reward for inputs). [Laissez-faire economy] A command economy is one in which the government makes all important decisions about production and distribution. In a command economy, the government owns most of the means of production; it also owns and directs the operations of enterprises in most industries; it is the employer of most workers and tells them how to do their jobs; and it decides how the output of the society is to be divided among ...
Post a Comment
Read more

Let's discuss the government budget

A government budget is a financial plan that outlines the revenues and expenditures of a government for a specific period. It is a crucial tool for managing a country's finances efficiently to achieve economic and social goals like promoting growth, reducing poverty, and providing public services. Monitoring and adjusting the budget as needed is essential for fiscal stability and sustainability.  In Nepal, the tradition of presenting an annual budget dates back to the 1950s, with the first budget presented in 1951 covering the period from March 1951 to February 1952. This change followed the overthrow of the Rana regime in February 1951. During this transitional phase without a legislature, the first budget was presented at the end of the year BS 2007 through Radio Nepal. The budget amount was Rs. 52,529,000, with a tax collection target of Rs. 30,619,000. The then Finance Minister, Subarna Shamsher, presented the budget as part of the council of ministers led by Prime Minister Mat...
Post a Comment
Read more

Economic Efficiency

A given economic arrangement is efficient if there can be no rearrangement which will leave someone better off without worsening the position of others. One important aspect of overall economic efficiency is productive efficiency. Productive efficiency occurs when an economy cannot produce more on one good without producing less of another good.
Post a Comment
Read more