Certification in Supplier Diversity Practice Exam

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What is the primary goal of protectionism?

To encourage free trade with minimal government involvement
To enhance international relations through trade agreements
To protect the domestic economy from harmful foreign competition
To eliminate regulations on foreign goods

The correct answer is: To protect the domestic economy from harmful foreign competition

The primary goal of protectionism is to protect the domestic economy from harmful foreign competition. This approach involves implementing measures such as tariffs, quotas, and various regulations that restrict foreign imports. By doing so, a country aims to shield its local industries and jobs from overseas competition that might offer products at lower prices or better conditions. Protectionism is rooted in the belief that a strong domestic economic environment is vital for national interests, job security, and maintaining economic stability. While increasing free trade, enhancing international relations, and eliminating regulations on foreign goods are important concepts in the broader context of trade, they do not align with the fundamental purpose of protectionism, which is centered on safeguarding the local market from external pressures.