Global Trade
Activity 3 Formative Assessment: Scoring Guide

  1. c
  2. b
  3. d
  4. Correct answers should mention or include the following:

    A tariff or any other protectionist policy is designed to protect new industries in the early stages of their development and growth. A firm develops a missile and satellite system to help global and military communications. Other firms work to provide parts and supplies for this project.

    1. A tariff protects the young company and industry from competition of more mature and stronger competitors.
    2. This allows growth and time to develop a way to compete evenly in the marketplace.
    3. Once this occurs, the tariff and protectionist policy can be eliminated since competition should be even now.
    1. Difficulties occur with protecting infant industries.
    2. An industry or firm that is protected often lacks the desire to grow and become more efficient and then more competitive.
    3. Usually, once an industry is protected, it is tough to take that "label" off of the industry. So, it may never "improve" and be a more maure industry to compete in the global marketplace.