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Countries are implementing economic protectionist policies.

  • Protectionism: Restricting imports from other countries.
    • Tariffs. The taxes or duties imposed on imports.
    • Quotas. Quotas restrict the volume of imports for a particular good or service.
    • Subsidies of select products.
    • A country can lower the value of its currency by selling its money on foreign exchange markets. That raises the costs of imports and increases the costs of exports. The trade balance gets better for a while, but inflation shows up. In the long run, it will raise the actual cost of exports and reduce the price of imports. An economic boom generates enough revenue for tariffs to fall. When the economic level falls, taxes go up again.
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